1 / 18

SO YOU’RE THINKING ABOUT SELLING YOUR BUSINESS

SO YOU’RE THINKING ABOUT SELLING YOUR BUSINESS. PREPARATION IS KEY SBDC Webinar – December 19, 2013 Mike Schoville, President, The Business Brokers, Inc. TOPICS. Maximum price Cash flow Valuation Tax returns Built to sell Steps for a saleable business Sales Process Timing.

orsen
Télécharger la présentation

SO YOU’RE THINKING ABOUT SELLING YOUR BUSINESS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. SO YOU’RE THINKING ABOUT SELLING YOUR BUSINESS PREPARATION IS KEY SBDC Webinar – December 19, 2013 Mike Schoville, President, The Business Brokers, Inc.

  2. TOPICS • Maximum price • Cash flow • Valuation • Tax returns • Built to sell • Steps for a saleable business • Sales Process • Timing • Planning: why is it important • When to start planning • Who can help • Succession options • Most appealing • Least appealing • Likely buyers • Financial options

  3. PLANNING: WHY IS IT IMPORTANT • To maximize the business value • To control the outcome • To attract quality buyers • To continue the business’ longevity

  4. WHEN TO START PLANNING • Ideal: When starting business • Minimum: 3 years before selling business • Financials, tax returns • People • Market • Products • Information • Competition • Capital expenditures

  5. WHO CAN HELP & THE cost • Accountant • Lawyer • Business Coach • Banker • Small Business Development Center • Board of Directors • Mentor • Twenty Group • Broker

  6. SUCCESSION OPTIONS • Liquidate • Hand off to family, friends or employees • Sellto a third party

  7. MOST APPEALING-BEST PRICE • Buyers understand • Retirement • Burnout • Health issues • Internal disputes • Changing career/lifestyle • Spouse request • Divorce • Upward trends • Good bookkeeping • All revenues included • Few add backs (EBITDA) • Business documentation • Key employees • Business runs without you there

  8. LESS APPEALING-LOWER PRICEMAYBE UNSALEABLE • Buyers don’t like • Declining revenues • Downward trends • Lost market share • Obsolescent product or service • Lots of add backs • Cash not recorded • High customer concentration • Need for large capital expenditures • New dominant competitor(s) • Low barrier to entry • No business documentation • Employee turnover • Only owner decision making • Owner integral part of business • Location

  9. LIKELY BUYERSPositives and Negatives • Relatives • Employees • Newbie • Competitors • Market expert • Equity group • Synergistic acquirer

  10. FINANCING OPTIONS • Cash • Bank financing • Seller financing • Combination • Earn Out

  11. Cash flow • What is it • How is it calculated • Why is it important • Used to determine price • The higher the cash flow, the higher the multiple

  12. VALUATION • Cash flow versus asset value • Three important ingredients • Can the buyer repay debt • Is there a debt service cushion • Is there adequate remaining cash flow for the buyer

  13. TAX RETURNS • Why they are important • Diametrically opposed goals • Minimum 3 years before selling

  14. HOW TO TELL IF YOUR BUSINESS IS BUILT TO SELL • Go on vacation • Then go on a 3 month sabbatical • Acid Test – how did it perform? • Build up to – 3 months away – not negatively impacted

  15. STEPS FOR SELLABLE CO. • Employees trainable & trained • Valuable to your customers, not commoditized • Repeatable, so customers repurchase

  16. Sales Process Market & Promote Prepare Offering Documents . List Business No Cost – No Obligation Evaluation (Pricing) Tour Confirm interest, answer questions Present Offering Buyers ConfidentiallyQualified Offer / Acceptance Financing Due Diligence Document & Agreements Well Deserved Vacation After Sale Training Clo$ing

  17. TIMING • Simple Economics of Supply & Demand suggests for sellers: Sell when few are selling • Expect to see more aging baby boomers sell their business in the next few years compared to the last few years • Profitability trending upward • Banks back in the market looking for transactions • Buyers need to have the financial strength and the relative experience

  18. QUESTIONS Mike Schoville The Business Brokers, Inc. 3050 SE Enterprise Drive, Suite B Grimes, IA 50111 Office: 515-986-6056 Cell: 515-306-8487 mschoville@tbbinc.com www.tbbinc.com

More Related