When you decide to sell your business, the first matter is gathering all the information needed for the broker. It is not smart to go to market without all the facts and documents available, organized and packaged for review by potential buyers. Doing so is being professional.
The broker should take the initial calls, get the NDA signed, qualify the potential buyer(s) financially and learn about the potential buyer’s background as it relates to the business being sold. Once past this first step, the package of information about the opportunity can be provided to the potential buyer.
After the potential buyer has reviewed the information provided and the broker has had a conversation with the potential buyer, the next step will be for the potential buyer to meet the seller on a conference call to discuss the business from a high level. This conference call usually takes 45 minutes to an hour. This is a light conversation, not an interrogation, with zero stress.
After the potential buyer has had a chance to digest the conference call details, the next step is to have a face-to-face meeting at the place of business. This is done after hours or on the weekend when no one else is around to be a distraction or interfere with confidentiality. This typically takes 60 to 90 minutes.
After the first personal meeting, additional questions probably will follow. Once we get past the questions, the next step is for the potential buyer to make an offer. It could take four to six interviews with different potential buyers to receive an offer that is acceptable.
With transactions at a value of $4 million to $20 million, the first step is typically a Term Sheet or Letter of Intent. The purpose of a Term Sheet or Letter of Intent is to come to a meeting of the minds pertaining to the main business issues before going to contract. With transactions of less than approximately $4 million, the offer is in the form of a Business Brokers of Florida Contract/Offer with contingencies including due diligence, getting bank financing and obtaining landlord approval to assign the current lease.
Once there is a signed offer/contract or for the larger transactions a signed Letter of Intent, due diligence begins along with the process of securing long-term financing. Much of the raw information needed will already be in hand for the bank financing. Due diligence will take some time and effort. It speeds up the process to have much of the information on hand that is almost always requested in addition to what was gathered for the sales package. This includes bank statements for the previous three years, as well as month-by-month financial statements, quarterly employment 941 tax reports and sales tax reports for the previous three years, to name a few of the common requests.
Once we get the due diligence done and the loan approved, the next step is preparing to close.
If you would like a confidential conversation about how to prepare your business to be sold, receive the best price possible and see the transaction funded so you get all cash at closing, please call Bob Dolan at 954-579-4687, email bobd@dolansales.com. My LinkedIn profile is at: http://www.linkedin.com/in/dolansales.
Related Posts
ComCapFL’s Business Broker Spotlight: Bob Dolan of Dolan Sales, Inc.
Waking up BEFORE the crack of dawn. Returning phone calls. Extra attention to detail. Creating...
5 Questions to Ask Your Potential Business Broker
If you’re in the process of finding a business broker to help you sell your company, you...
How to Choose the Best Business Broker: 8 Essential Qualities to Look For
Did you know that, according to the U.S. Small Business Administration, there are over 30 million...