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SELLING YOUR BUSINESS
Should You Consider Selling Your Business?
Selling your business is a major decision! You have
committed your time, money and energy to building this company. Business
owners have many motives for wanting to sell. The most common reasons
are:
 | burnout |
| retirement |
| desire for a new challenge |
| health problems |
| dissolution of partnership |
| lack of working capital |
| lack of a successor |
| divorce |
You have decided that now is the right time to sell and you need the
best professional guidance you can get. You want a team of professionals
to assist you. This should include your accountant, attorney, a tax
expert and a professional business broker. The right team can mean the
difference between getting rid of your company and selling it for the
very best price and terms.
How Much is the Business Worth?
Most sellers have some idea about what their business should sell
for. This is taken into consideration, but the business broker is
familiar with the local market, and by reviewing financial information
can make a recommendation of what he thinks the business will sell for.
A range is normally set with a high and low price.
In many cases, the way the sale of the business is structured, and
the buyer’s experience and financial statement, can be more important
than the actual selling price. Most businesses will sell if priced and
structured properly.
Kane Business Brokers will review your business operation and its
financial records, then use techniques proven in the Tucson area to
assist you in determining the fair value of your business in today's
marketplace. The sellers must realize that a buyer will only pay for
what a business is worth today – not what it might be worth in the
future.
We will prepare a professional outline of your business, describing
its history, operations and all other aspects. We know that most
privately held businesses prepare their financial information to
minimize their taxes. We will assist you in recasting your records to
show your business in the best financial light.
Finding the Right Buyer
Kane Business Brokers will guide you through the time-consuming
process of finding the right buyer, negotiating the many details of the
sale, and working closely with the accountants and attorneys involved.
We use many different methods and strategies for attracting potential
buyers. Some of our methods are local advertising, the Internet, our
30-year customer base in the Tucson area, direct mail, and trade
magazines.
We conduct personal interviews with prospective buyers to determine
their individual requirements, goals and objectives. We also discuss the
financial resources they have available to purchase a business.
The Phases of Selling a Business
We will help you through each of these phases:
| Initial consultation about selling your business |
| Valuation of the company |
| Establishing the appropriate price, terms and security |
| Preparation of a comprehensive package for presentation |
| Qualifying potential buyers |
| Preparing the Deposit Receipt and Agreement |
| Negotiating the transaction |
| Assisting you through the complete close of Escrow |
Confidentiality
Kane Business Brokers engages in transactions that require the utmost
level of confidentiality, similar to the relationships of attorneys and
CPAs with their clients.
We will not discuss any confidential details concerning your business
over the telephone, nor will we give confidential information to
potential buyers until they have signed a confidentiality and
nondisclosure agreement.
Services
We schedule and attend all meetings between the seller and the buyer,
and attend any meetings with other professionals. We write the Deposit
Receipt and Agreement, deposit all Earnest money funds into Escrow and
coordinate the closing with the Escrow officer. Then we stay involved
until the transaction is successfully closed.
What You Can Do to Help Sell Your Business
It’s extremely important that you continue to run the business in
an aggressive, growth-oriented way. Do not let up on business operations
while your business is for sale. You should make most of your decisions
based on the best interest of the long-term objectives of the company.
Maintain up-to-date financial information. Work with your accountant
to provide monthly statements with year-to-date numbers. Buyers want
real data, usually no more two months old.
Understand the tax implications before setting the selling price.
This may very well require the assistance of a specialist in this field.
Your company accountant is an expert at keeping the records of the
company, but may not be completely up to date on some of the latest
structures that can be employed to reduce your total tax burden. An
effective tax plan can let you price the business much more attractively
without sacrificing your total return. This is a critical step in
developing a win-win transaction.
You should also be prepared to close quickly. Once an agreement is
reached between buyer and seller, buyers generally want to close as soon
as possible. It is a fact that businesses rarely improve between the
time a seller signs a contract, and the closing. Customers, key
employees and competitors may react in different ways when they hear of
the sale. The sooner the new owner takes over, the sooner some of those
fears and anxieties will go away. If there are actions that you have
deferred, such as maintenance or repairs, you should take care of them
at once. There will be a lot to do as the closing approaches -- so
everything that can be done in advance of an offer should be done. |
