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The Selling
Process … In Detail
Our job, as we see it, is to provide the insight, experience, and
objectivity to help decision makers make the most beneficial decisions in the
business selling process.
Decision to Sell
We place special emphasis
on the first three decisions a selling owner must make.
1.
Do I really want to sell now?
2.
Is my business in a salable condition?
3.
What price and terms am I willing to accept?
Assemble Info
Once, after reviewing alternatives, the decision
to sell is made, our associates study your business operations and gather
basic information concerning your company.
1.
3 years Federal tax returns and/or accountant produced financial
statements
2.
Most current balance sheet
3.
List of furniture, fixtures, and equipment together with an
estimate of current value-in-place.
4.
Average inventory value
5.
Business history
Industry Research
Our associate will provide
the information to our research group who will gather the following:
1.
Information on the state of the company’s industry
2.
Industry averages, possible comparable sales data, etc.
Assess State of the Business
At this point, both seller
and broker together decide on whether a full report including remedial
information and a valuation is required in order to prepare a business for
the marketplace or if a business is ready to go to the market as it stands.
o Valuation
Report and Diagnosis – under the first
option, Business World’s Research Department will prepare a full Valuation
Report including a diagnosis of the company’s operations and recommendations
of the corrective measures required.
o Market
Ready Business – When a company is
ready for market, the seller and Business World enter into an Exclusive
Right to Sell Agreement. Upon being “hired”, the research group
prepares a Broker’s Opinion of Value that is subsequently submitted to the
seller for approval. A comprehensive Marketing Package along
with summary, non-identifying Internet listing information is
prepared.
Fees for Services
A “Partnership” in Selling the Business
Once you have determined
that you want to sell your business, there is normally a modest up front investment
from you in terms of a Valuation Fee
for our initial and extensive services in preparing the valuation, packaging,
marketing plan, advertising, etc. The primary compensation is a Success Fee based upon percentage of
economic value of the transaction and is payable upon closing, usually out of
the proceeds of the sale.
Our view is that the
relationship between the seller and us is that of a partnership for the term
of our agreement. We work together with the seller making important
decisions to achieve a mutually beneficial result.
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7 Reasons Why A Specialized Brokerage Firm Does
It Better
1.
Good firms
provide a “Confidentiality
Shield.” Only qualified
buyers ready to buy ever find out the identity of a business for sale.
The many “tire kickers” never know the company’s identity.
2.
A third party
firm is more objective in estimating a proper selling price and in
negotiating a deal. Buyers are more open with a third party than they
are with an owner.
3.
Consultants are
specially trained and handle many transactions so they are usually more skilled in business valuation, marketing, negotiation, deal
structuring,, and finance.
4.
By handling all
the time consuming details of the marketing and selling process, the business
owner remain free to
run their business during a time
when the business should be at its very best.
5.
Specialized
firms usually get a better
price for a business due to their
valuation and negotiation skills, buyers’ tendency to discount a fee out of a
direct offer to a seller, and buyers’ fear of making an “insulting offer” to
a seller. Low offers in the hands of an expert often lead to a sale.
6.
Specialized marketing
and consulting firms successfully employ the shotgun approach to selling. Buyers attracted to a
well-crafted ad or Internet description on one business are often switched
over to another of the firm’s listings.
7.
By attracting several
potential buyers to one listing with the full knowledge of the competing
buyers, a controlled
auction is often created which
usually produces a higher price in a shorter period of time.
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