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Selling a Business • 12 Steps • Succession Planning
The Unsolicited Offer • How We Sell Your Business

The process for the successful and profitable sale of a business has several steps. Our process permits our clients to proceed from a position of strength in selling for maximum price for the best possible terms at the most appropriate time.

PLANNING YOUR WORK

Evaluation

The valuation of a business involves extensive research and analysis of all elements which impact value. Its strengths and weaknesses are assessed and the business is viewed as it would be by a potential investor. Exacting and detailed financial forecasts are developed and supported by market research to demonstrate and substantiate future profitability to buyers.

Market Research and Analysis

This segment of the evaluation process is crucial to potential buyers as it provides a defensible foundation for the five-year pro forma and lends credibility to the projections of future earnings.

The position of the company within its industry is examined, as are current and potential markets. Industry trends, growth factors, competitors and market niches are evaluated. Geographic influences are analyzed.

Recasting

Since privately owned companies often tend to keep reported profits and thus taxes as low as possible, financial recasting is crucial in understanding the real earnings history and the future profit potential of a business. Buyers are interested in real earnings and recasting shows how a business would look if its philosophy matched that of a public corporation in which earnings and profits are maximized.

Five-Year Pro Forma

The price that a buyer may be willing to pay depends on the quality and reasonableness of profit projections which you are able to demonstrate and substantiate.

The profit and loss statement, balance sheet, cash flow, and working capital requirements are developed and projected for each year over a five-year planning period. Using these documents, plus the enhanced value of a business at the end of five years, the discounted value of future cash flow is calculated. This establishes the primary economic return to the buyer.

The Evaluation Report

This report represents the opinion of business professionals who are expected in the sale and transfer of business assets and values. The report is designed for use solely by the client and their advisors and should not be presented to potential investors.

This report should be utilized as a tool to:

Determine if now is a good the time to sell. If not now, then what steps should be taken to prepare the business for sale and/or increase its value?
Develop an effective marketing plan built around the uniqueness of the company.
Identify the best way to position the company to obtain the highest or best value.

Exit Planning

Since the ultimate structure of transfer of ownership is based on one's specific goals and the rewards which one hopes to reap from the sale of a company, a most important element of the process is a "personal needs" discussion. The assessment of options available forms the basis for a personal exit plan.

Does the client wish to leave the business immediately or stay ion in some capacity after the sale? What forms of compensation are they seeking - cash, stock, secured notes, convertible bonds, annuities, share of future earnings, royalties, licensing or consulting agreements or buy-back opportunities? The client decides which best suits their needs, goals, and tax position at the time of sale and for the future. With needs and goals identified, we are prepared to negotiate a sale which will best satisfy those needs and fulfill those goals.

WORKING YOUR PLAN

Marketing

With your goals clearly defined, research and documents completed, you are ready to market with no price to multiple buyers. Buyers who have given us their criteria, acquisition history and financials that match your goals are contacted. They receive a generic profile or "snap-shot" of an unidentified company and a confidentiality agreement. A list of buyers, pre-approved by you, is contacted by us. The buyer can be international, regional, public or a private investor group.

Buyer Strategy

Buyers may need product lines (new or extensions), new markets, customers, distribution, sales, manufacturing technologies or similar synergistic benefits. How buyers perceive benefits affects their value. That is why we market to multiple buyers with no asking price.

Negotiating

With the best buyers identified by us and approved by you, we control exposure with (generic) business profiles, confidentiality agreements, buyer indication of value and the Business Review. After the buyers have been screened to be those with serious interest, we negotiate in your behalf to accomplish your goals. We are experienced and seasoned dealmakers that handle sophisticated, experienced buyers every day. We emphasize future value and synergy - rather than price -- in order to optimize price and terms.

Letter of Intent

With preliminary negotiations of price, terms, tentative structures met and framework in place, the letters of intent should follow. This agreement to agree should cover economic considerations, tax and legal matters, representations, warranties, financing, key employees and participation in business after the sale.

Due Diligence

After the letter of intent is signed, the buyer will bring in his team for due diligence. The buyer's team may include bankers, accountants, attorneys, tax experts and others. They will view the value differently because of varied experience, backgrounds, disciplines and egos. This is a very sensitive time when our resources, skill and experience may be needed to keep everything on track. Research, documentation and value will be evident and it is where our experience pays off.

Closing

When your needs have been met and the buyer and his representatives are satisfied with the price and terms - assured that they are obtaining the value which they are seeking - the transaction is culminated in the signing of the Definitive Purchase Agreement. These documents legally transfer the stock and/or assets of your company to the buyer in exchange for the full financial consideration that you have expected. Your goals have been achieved, your plan has worked.

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Selling a Business • 12 Steps • Succession Planning
The Unsolicited Offer • How We Sell Your Business