FINAL ACTS OF BUSINESS OWNERSHIP
Larry Lamphier, P.E., MBA
Management Consultant Helping business owners answer difficult questions.
Six steps to help you get full value when you’re ready to make your exit.
1. Know your value
You'll want to determine a fair market estimate of your business’ worth to set a realistic price. Find a business?appraiser?to get an unbiased?valuation. The appraiser will draw up a detailed explanation of your organization’s worth, which will bring credibility to the asking price and can serve as a gauge for your listing price.
Wintergreen Associates?is available to provide education, options, methodology and considerations to help determine a fair market exchange strategy for a sale.??
2. Enhance Your Business
Even when the market is good, few businesses are naturally staged for a top-dollar sale. While you're actively running your business today, you can get a professional assessment of your business operations, management team, customer service operations, customer satisfaction measures, financial reporting structure, asset accounts, and other aspects of your business to improve performance and put more money in your pocket when it's time to retire or move on to the next opportunity.
We provide services designed to help business owners improve the profitability and value of their companies. We apply Business Enhancement Strategies, the 8 Value Building Factors, and other Wintergreen Associates tools to help owners assess their current situation and identify areas for improvement.
3. Prepare a Business Prospectus
A company's?prospectus?is a formal document designed to provide information and full details about the business offered for sale. A prospectus reads like a mini business plan. The prospectus is made available to potential buyers before a purchase, so it’s best to have this document completed and ready before announcing your intent to sell publicly.
Our team?can assist in the preparation of a pre-sale business prospectus that outlines past performance, provides future projections, and supplies other data that will show companies in the best light possible to attract interested buyers.??
4. Assemble Your Advisory Team
You will need a team with specific skills to advise you during the sale of your business. Specifically, you’ll need the expertise of an attorney, an accountant, a banker, a personal financial advisor, a real estate broker (if needed), and potentially a business broker.
Today, selling a business is so specialized that even the best attorney, accountant or real estate broker may need additional help from a savvy business broker who knows where the buyers are for your particular business. With the right team in place, the advice they offer will help you navigate the sale process with optimal results.
?Wintergreen Associates can help assemble and coordinate an advisory team that is focused on optimizing the value of the sale and structuring the sale to maximize benefits for the business owner.
3. Prepare a Business Prospectus
A company's?prospectus?is a formal document designed to provide information and full details about the business offered for sale. A prospectus reads like a mini business plan. The prospectus is made available to potential buyers before a purchase, so it’s best to have this document completed and ready before announcing your intent to sell publicly.
Our team?can assist in the preparation of a pre-sale business prospectus that outlines past performance, provides future projections, and supplies other data that will show companies in the best light possible to attract interested buyers.??
4. Assemble Your Advisory Team
You will need a team with specific skills to advise you during the sale of your business. Specifically, you’ll need the expertise of an attorney, an accountant, a banker, a personal financial advisor, a real estate broker (if needed), and potentially a business broker.
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Today, selling a business is so specialized that even the best attorney, accountant or real estate broker may need additional help from a savvy business broker who knows where the buyers are for your particular business. With the right team in place, the advice they offer will help you navigate the sale process with optimal results.
?Wintergreen Associates can help assemble and coordinate an advisory team that is focused on optimizing the value of the sale and structuring the sale to maximize benefits for the business owner.
5. Identifying Target Buyers
As a business owner, you may think your prospective buyer is someone just like you, with the same motivations and passion for your business. Interestingly, there are many types of prospective buyers for your business but can be classified to two major groups, Strategic and Financial.?A “Financial” buyer is looking for an interesting or new category of investment to add to their portfolio. The “Strategic” buyers may be looking for businesses that fit into their existing business model. They may be your suppliers, vendors, customers, or even competitors. Take the time to make a list of all possible buyers, even if they seem like longshots. Work with your advisor to develop this list and devise a plan for approaching them all.
Our team of experts can facilitate the creation of a list of potential buyers from similar industry companies and companies known to the Client.?Wintergreen Associates can coordinate notifying those companies of the Clients’ intent to sell.?If no viable buyer is found in this pool, our team can assist with additional sales strategies.
6. Plan Your Negotiation Style
It’s wise to plan your negotiation strategy before you have an interested and qualified prospect. Remember that your goal is to sell rather than to beat the buyer at a negotiation game. You and the buyer should lay the foundation for a team effort to get to a closing.
Don't allow yourself to get bogged down in disputes with your buyer. Your ego should not distract you from satisfying your underlying need to sell. Instead, treat your buyer as an ally and focus on interests rather than on positions. Generate a variety of solutions before deciding what to do about any particular point of disagreement. Try to resolve the toughest issues with objective criteria or independent standards.
Use your business broker as your intermediary, to serve as your safety valve and to help you avoid unnecessary disputes. Be responsive and prompt during negotiations to show good faith and to help assure timely closing of the sale. Also, have an NDA, a non-disclosure agreement ready for the prospective buyer to sign.?Do not rely on an NDA provided by the buyer.
Prospective buyers can, and do, change their minds. Once the prospect makes a commitment to buy, it’s wise to get it in writing immediately along with a significant non-refundable earnest money deposit. After the initial agreement is signed, close as soon as possible. Your business isn't sold until the check clears so make sure the money is in the bank before you set plans in motion for that well-deserved vacation.
Wintergreen Associates can assist with client negotiations, due diligence, and with attorney preparation of a purchase agreement and related documents to help provide the best options for clients. We can also help by answering financial, operational and business outlook questions from buyers.
Call Larry at 440.346.0402 or email him at [email protected]
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About Wintergreen & Associates
Over 35 years of business ownership and general management experience in fortune 100, private industry and family owned?businesses improving and restructuring turnaround companies.