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Considering the sale of your business? You will find a wealth of information here to organize your process.
There are many reasons for business owners to sell. Any of the following scenarios can trigger that decision.
- Owner reluctant to invest to take business to next level
- Technology changes and customer base changes
- Recapitalization needed to grow the business
- No family or partner to turn company over to
- Business relocation due to expiring leases
- Lender’s refusal to provide credit lines
- Owner or family health problems
- Difficulty with supplier
- Estate planning need
- Owner burn-out
- Staffing difficulties
- Retirement
International Business Brokerage & Realty Inc. adds value to the sale for the seller who may walk away from the sale with more money and under better conditions than might be possible with the seller selling his/her business directly. Research shows the value added to the selling price averages 20% in closed transactions, and a much higher likelihood that the sale will close (attempts by sellers and buyers to deal directly fail 95% of the time!).
Here is how we can help you through this process:
- By channeling through us, you, the seller, will remain anonymous to the buyer until he has substantiated that he is financially capable of purchasing the business. This confidentiality is important so that you maintain your accounts, keep your employees, and maintain your clients. A seller may not even want family members working in the company to know he is selling the business as it can ignite emotional upheaval in the workplace.
- We provide outsourcing or independent appraisals for business evaluation. This information will provide you with a third party opinion of the value of your company. Our job is to gather all the information and organize it for the business valuator. With a business valuation, the broker will go to the market with substantiated information for the buyer's offer. This information is especially important if you wish to have the SBA finance the business.
- We will recast the owner benefits after receiving the appraisal. This may be a difficult process for owners who have run their business for years....they are good at that; they have had vision and stamina; we are good at selling the company. Many owners may be unaware of their acceptable and non-acceptable deductions and also be unaware as to how to price the business; they may put an emotional value on the company which may put the business out of the marketplace entirely. Our job is to find an acceptable market price. You will also need to consult with your own CPA to get an estimate of what the tax consequences will be with the selling of your business.
- We acquire comprehensive knowledge of the business. As the seller, you may know what doesn't work in the company but because of your deep involvement may not know its strengths and how to market those strengths. We assist you in maximizing your company's potential and minimizing your company's risks.
- Negotiating the deal is a stressful time. Sellers are caught up in the moment with not getting it all and believe that the buyers are caught up in wanting it "all for nothing." As the intermediary or business broker handling the transaction, it is important to keep emotions out and reason in. "It's not the price of the deal but the terms" is well-known axiom in our industry, but we also say that both the price and the terms must remain paramount and relative to each other. Consulting fees, capital gains tax, and seller notes are some significant factors which can affect the sale and purchase of your business.
- We work at keeping the team process going smoothly. There are many distractions that are occurring during the marketing and selling of your company. You are still running the day to day business and the buyer is after every bit of information he can get to substantiate the price or reduce it. Being organized and having credible information available is important; having a competent, deal making business attorney and a knowledgeable accountant available is critical.
- Below are some of the items you will need:
- Inventory included in sale of business (If possible, original cost and age; if leased, copy of agreement/terms)
- Equipment included in sale of business (If possible, original cost and age) (If leased, copy of agreement/terms)
- Profit & Loss Statement (Balance Sheets & Income Statements) and Tax Returns for last three years and current year to date
- Personal Item List within the business not included in the sale
- Real property Tax Bill/Appraisal if available (If the property is to be included along with copies of notes and mortgages) or a Copy of property Lease
- Key Employees with payroll breakdown, time employed, and evaluations of each (Name/Salary/Rating of excellent, good, fair, poor)
- Owner’s expectations for the Business/ History of Business, short narrative, with brochures and pamphlets
- Meeting/telephone (approximately two hours) of initial introduction and information
- Business Valuation (independent third party valuation)
- Processing Fee (refundable/credited back to you at closing)
STEPS TO ASSURE A SUCCESSFUL SALE
- Clean up the company Balance Sheet by removing assets that are old, unusable or cannot be sold
- Do tax planning before marketing the company. It may require restructuring.
- Have audited financial statements to add credibility and value. Keep all receipts.
- Manage the income statement to alleviate inconsistent growth and earnings.
- Raise the company’s public profile to add visibility and perceived value.
- Document the competition comparing similarities, differences, strengths, vulnerabilities.
- Examine your company as a buyer would. Conduct your own due diligence in areas of operations, marketing, personnel, technology, legal, regulatory, environmental, insurance, contractual, credit and accounting.
- Understand the buyer’s needs regarding return on investment, debt service, and other core requirements.
Below are Services that we can help you with by directing you to the professionals who specialize in their fields:
- Accounting
- Benefits Consulting
- Business Consulting
- Communications Consulting
- Construction Industry Services
- Executive Coaching
- Healthcare Solutions Consulting
- Human Resource Consulting
- Information Technology Consulting
- Insurance Services
- Investment Banking
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- Litigation Support
- Marketing Consulting
- Mergers & Acquisitions
- Outsourcing
- Performance Consulting
- Personal Financial Planning
- Real Estate Advisory Services
- Retirement Planning
- Small Business Consulting
- Tax Consulting
- Valuation Services
- Wealth Management
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We offer a variety of structured fee based plans to work with seller's needs. This fee is usually built into the selling price and paid by the seller. but sometimes paid by the buyer. The purchase price may include the commissions that paid to the broker for the effort and expertise. Our goal is to create a successful transaction for you.
For a confidential meeting to discuss the options to sell your business, call or email us.
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