The Sale Process

The Sale Process

The business sale process has a number of distinct stages and typically takes 6 to 10 months to complete.

The Business Sale Process

Finding the Right Buyer

Finding the Right Buyer

There are strategic and financial buyers. The best buyer is the one that benefits the most from the purchase.

Finding the Right Buyer

Valuation

Valuation

A business's value is determined by market comparables as well as business specific analysis.

Valuation

Buyer List

Finding the Right Buyer for Your Company

In constructing a buyer list, do you include immediate competitors or will they not be a “good” buyer.  Every company has a different culture and reputation in market and you may not want your legacy in such a company’s hands. Questions to Consider It is important to think through your objectives. Realizing the most money…

LOI

Why is the Letter of Intent (LOI) so Important?

The letter of intent is important because, in the context of a business sale, it marks the critical point where power shifts from the seller to the buyer. What I mean by this is that an LOI typically includes a term requiring exclusivity.  Exclusivity means the seller has to stop engaging with other possible buyers…

Purchase and Sale Agreement

The Purchase and Sale Agreement Explained

The Purchase and Sale Agreement (PSA or SPA in the case of a Share Purchase Agreement) is one document in a set of final documents that completes a company sale transaction.  Other documents typically include employment agreements, escrow agreements, non-competition agreements, releases, schedules and more depending on the type of transaction being contemplated. Importance of…

Examples of Acquirers Paying a Premium

5 Examples of Acquirers Paying a Premium

What are buyers looking for in acquisition targets?  The objective of an acquisition is to create value.  This is accomplished by improving profitability and/or reducing risk; both enhance earnings quality and drive value.  More specifically, acquisition objectives can include achieving economies of scale or economies of scope, vertical integration, securing access to talented management, unlocking…

How long does it take to sell a company

Business Sale Time-frame (with milestone chart)

Selling a business requires careful planning — everything from cleaning up the books and tax records to updating old operating systems—even ramping up marketing to accelerate sales to be able to command a higher asking price. All too often, an unexpected factor—an aging or ill owner, lack of interest in succession from adult children, or…

how to choose a business broker

5 Things you Should Know About your M&A Advisor

In the process of choosing an M&A advisor to manage the sale of your business, you will undoubtedly have a discussion about valuation and price expectations.  During such discussions, some advisors will lead you to believe they will secure a higher price than others. How much should you weigh such differences in your decision to…

Selling a Small Business

Time-frame and Steps in Selling a Business

When is the right time, and what are the steps in selling your business? The ideal time to sell your business is when there are positive trends in revenue and earnings with the expectation of more to come.  Growth is very influential in attaining a strong valuation multiple and, while valuation is technically determined by future…