Although buyers for businesses are not in short supply, matching a buyer with an existing business isn’t always as simple as it might sound. That’s why mergers and acquisitions experts suggest anyone contemplating selling a business work with a local business broker for best results.
We are currently in the longest bull market in history, but there are signs of a slowdown. Have you considered selling while the economy is still strong? If not, you should consider your options and what it takes to get the wheels in motion.
Getting Started: Evaluate the Value of a Business
Anyone asking how to sell a business wonders how the process actually starts. The first step is to determine the value of the business. Properly evaluating any business requires a certain level of expertise, as there are many factors involved in the determination of value.
When selling a business, gross sales figures, profit margins, equipment, and inventory all have values. Intangibles assets, like reputation and goodwill also play roles in the business’s valuation. Most importantly, the cash flow of the business and any necessarily adjustments will be the primary driver of your business’s value. Determining how this pieces together is one of the primary roles of a mergers and acquisitions advisor.
Putting the Best Foot Forward: Developing a Pitch Book
Marketing is somewhat of an art, and mergers and acquisitions professionals understand how important it is to present a business in the best light possible. The pitch book must contain all the information prospective investors need to determine if an acquisition is viable.
The marketing experts work closely with the business owner, as some information must, by its very nature, remain confidential during early marketing stages. At some point, all pertinent information must be disclosed to buyers, but the pitch book’s objective is to determine which buyers are more likely to take that next step in the buying process.
Moving On: Matching Buyers with Sellers
Not every business matches the needs of specific buyers, which means mergers and acquisition specialists must work diligently to match a buyer with an ideal business for sale. In some cases, that may take a little time, as the pool of businesses for sale isn’t exceptionally large. However, when determining how to sell your business, marketing professionals have the experience and connections necessary to pair sellers with prospective purchasers.
Negotiating Skills: Experience Makes a Difference
Business owners frequently ask brokers to “sell my business” because they realize the mergers and acquisitions professionals have the skill sets necessary to negotiate a transaction properly. When the objective is to net the highest profit possible from the sale of a business, owners rarely have the experience to negotiate prices and terms effectively.
Getting to the Closing: Facing Those Inevitable Problems
Any business for sale will face problems between the signing of an intent to purchase and finalizing the transaction. It’s a fact of life that issues no one anticipated will emerge. Mergers and acquisitions professionals manage through the challenges to make sure the transaction closes and everyone involved is satisfied with the results.
Taking the First Step: A Simple Phone Call Gets the Ball Rolling
If you’re considering selling a business, it pays to consult industry experts early in the process. Doing so virtually eliminates the problems many business owners confront when going forward with a sale. If you’ve got questions about how to sell a business, the answers are only a phone call or email away. Contact CGK today to schedule a consultation or visit our website for more details. It’s easy and free — and it’s a great step toward determining your options and how to move forward.