Selling your Business – Starting the Process
One of the hand-outs our sales reps may provide before meeting or at the first meeting with a business owner is a 20 step sales process outline. Below are these steps condensed into 15 steps process to sell your business.
1- Initial Meeting: In the first meeting you’ll be introduced to our company and how we can help with the value of your business. During this meeting, the sales rep may ask to review your business tax returns, company financials, any sales or marketing materials and any other relevant information that may help explain your business in more detail. After this initial meeting, a decision will be made whether to move forward at this time.
2- Recast Financial Statements & Market Value Analysis: Our Lakes Business Group (LBG)
sales rep recasts or normalizes your financial statement to reflect non-reoccurring expenses and prepares a market value analysis. If the decision has been made to obtain a third-party business valuation, the sales rep will prepare the business outline and coordinate with the Valuation Analyst. Our goal is to get the most value for the business.
3-Proposal: LBG sales rep will present and explain the recast financial statements and the market value analysis. Once a comfort level has been established and both sides feel that LBG is a great fit to work in the seller’s best interest, the sale rep will provide a proposal regarding the cost of services.
4-Documentation: You, the seller, will provide the LBG sales rep with the necessary documents and data required to sell you business. LBG prepares a business profile based on the information you have provided. Details are not released to any prospective buyers without the execution of a non-disclosure agreement to protect the confidentiality of your business.
5-Advertising and Marketing: Lakes Business Group team takes control of the advertising and marketing for the sale of your business, which results in the highest possible response and the greatest number of prospects. Your business will be advertised on our website, as well as numerous other websites featuring ‘businesses for sale’. Our office is associated with VR, an international professional business broker organization, so the business is also featured on the VR website. Besides online advertising, we send letters to other businesses who may be looking for an acquisition, as well as marketing to our database of over 20,000 vetted buyers looking for a business to purchase.
6-Buyer Qualification: As mentioned in #4, all prospective buyers must sign a non-disclosure agreement before reviewing your business profile. We also vet the financial capability prior to introducing prospective buyer to you, the seller. In our business, we’ve seen it may take 39 interested buyers to find one qualified buyer for your business.
7-Business Presentation: After the buyer is financially qualified and the LBG sales rep has talked with them and feel there is a good fit for your business, a conference call or meeting is scheduled with you, the seller, and prospective buyer. A showing of the business may be scheduled at the same time.
8-Offer to Purchase and Presenting the Offer: We encourage the buyer to write a fair and equitable offer with an amount of earnest money to be paid up front. Presenting the offer to purchase includes an explanation of the terms and conditions, any contingencies and background information on the buyer.
9-Offer Acceptance or Counter Offer: You may accept the offer as it is written, or with the help of your LBG sales rep create a counter offer or reject the offer entirely.
10-Mutual Acceptance: When all parties agree to the terms and conditions of the sale, and sign all counter offers and amendments, the offer becomes a Purchase Agreement.
11- Assist with Financing: LBG has numerous financial resources including lenders who specialize in business loans. With our assistance you and the buyer can determine which financing will work best for both parties which will end in a successful transaction.
12- Due Diligence: Almost all offers are contingent upon the buyer’s inspections and approval of all facets of the business operation including financial records. The coordination due diligence process is a crucial step in a successful sale. LBG will keep a spreadsheet of the items needed and completion dates to keep both the seller and buyer on task.
13-Note and Lien, Search, Clearance or Assumption: If there are existing loans, liens or equipment leases that the buyer is to assume, LBG can help with transferring those obligations. All liens must either be cleared or transferred to the new buyer, if part of the contract.
14-Inventory: Arrangements are made for the seller and buyer to count and price the inventory if it applies to the business that is being sold. If the inventory is large or complex, it may be necessary to outsource to an inventory service.
15-Closing: After signing the final closing documents the business is transferred and the funds are distributed. Congratulations! you have sold your business!