Sales Process for Selling Your Company
Consultation
The first step in the business sales process is considering the possibility of selling your company. For a Confidential Consultation, you don’t necessarily need to have finalized the decision to sell. It’s a conversation where we can find out more about your business and give you a ballpark figure on a potential sale price. Then, you can decide whether to have a more in-depth discussion and potentially set up a meeting. To give you a selling price range.
Review Financial Information
Before you release your financial information to us, we can sign a confidentiality agreement. Then, we’ll request the tax returns for the last three years and a current year-to-date profit and loss statement. We’ll also want to understand your total owner’s income, including your salary, benefits, perks, and net income. Other items include the approximate value of your business’s assets, including inventory, equipment, etc.
Advertise and Market your Business
We advertise on Google, Facebook, LinkedIn, Bizbuysell, our website, and more. In addition to advertising, we have a potential buyer database of buyers that we can contact.
Interested Buyers
Before we provide details, they’ll sign a confidentiality agreement and provide us with info on their qualifications. We’ll start to narrow down which buyers are qualified and interested so that we can provide details.
Initial Q&A with buyers
Once we have qualified buyer, we will then discuss the business with them and answer any questions that we can for them. We’ll also get a feel for their timeframe and motivation, as well as a greater understanding of why they are interested in your business specifically.
Introduce Buyer To Seller
We will give you information on the potential buyer’s background and interest and set up a phone call or meeting with you. This is an excellent opportunity to find out more information on both sides. It’s also an opportunity to see if you can see this person taking over your business.
Buyer Submits Offer
We’ll go over the offer with you and discuss not just the price offered but other items, such as the terms of the sale, due diligence requirements, and how likely we think the buyer is to close on the deal. We will consider whether they need financing or not, their interest in moving quickly, and more.
Negotiate Offer
We have seen plenty of offers, so we have experience deciphering the various pluses and minuses. What is included in the sale may be a point of negotiation, such as price, terms, conditions (financing and due diliegence) accounts receivables, payables, inventory, closing date, and transition period from the seller.
Due Diligence
The amount of due diligence that each buyer requests does vary depending on the size of the deal, the buyer’s background, and the available information. If there is bank financing involved, then the bank will also require due diligence information. Usually, the buyer will have their accountant review information and request information from the seller and their accountant. In addition to the financial information, they will want their lawyer to view any contracts that the seller’s business has with suppliers, customers, and employees.
Negotiate Purchase Agreement
The buyer’s attorney will go over any issues with the buyer, and usually, they will request some changes to the purchase agreement. Normally, there is a give-and-take between attorneys and buyers and sellers, with any final terms to be negotiated. Once the issues are resolved, the final step in the business sales process is to set up a closing date.
Closing The Deal
Congratulations, the deal is closed. Now, the seller will typically provide a transition period that has been negotiated, during which they will help the buyer take over the functions of the business and assist in understanding the customers, products, services, and employees. The transition period can vary from a few days,weeks or months. This is depending on the needs and desires of both buyer and seller.