Once a potential buyer has been qualified as a fit for your business from a financial and business experience perspective, and has signed a non-disclosure/confidentiality agreement, they typically want to quickly determine if the opportunity is worthy of a closer look. Many times, an intermediary has not compiled all the needed strategic information in a concise, organized, professional manner. This causes the potential buyer to lose interest, not get the most favorable first impression of your business, and lose credibility in everything which will follow.
A few of the most important steps in the sales process to sell a business are:
- Spending the time to learn about the business being sold, to ensure correctly presenting all the attributes of the business and to accurately show Earnings Before Interest Depreciation Taxes and Amortization (EBITDA) and Seller Discretionary Cash Flow (SDCF).
- Evaluating all the factors that should be considered to establish the price to go to market, or not to set a price at all.
- Making sure the advertising is correctly worded to attract the correct type of potential buyer in a manner that emphasis the attributes of your business, without over-selling.
- Being prepared to immediately respond to all inquiries personally, and getting an NDA, as well as a Personal Balance Sheet, to the potential buyer, to complete and return.
- Knowing beforehand the cash requirements that a buyer will need to secure long-term third-party financing to immediately qualify a potential buyer and establishing – from the bio provided – whether the potential buyer has the experience that will be needed to be successful in the business and secure long-term financing.
- Having a personal conversation with the potential buyer to discuss exactly what they are looking for and establish if the opportunity is a match.
- Having a complete, organized package of the information that the potential buyer will need – this is essential. Time is of the essence once a potential buyer has been engaged in the process. Some of this information includes the prior three years of corporate tax returns and financial statements, a list of the assets, the sales ranking of the top 10 customers, and a copy of the business lease.
Any intermediary you use should make sure you have all of this material in hand. Call me (888-893-6661), or view my LinkedIn profile at www.LinkedIn.com/in/dolansales, and let’s discuss the remaining steps of the sales process.
Dolan Sales, Inc. is a Lower Mid-Market Business Broker and Intermediary, serving customers nationwide.