Selling a business can take months, and some of that time requires the seller’s attention and presence. But the earliest part of the process often doesn’t. Some sellers interpret the initial period after signing on with a broker as inactivity, but in truth, there’s plenty going on behind the scenes.
Here’s what our process looks like:
Creating the marketing materials. Marketing a company for sale is both an art and a science. We want to include enough information to attract a pool of buyers, but keep the details vague enough that your employees, customers, and competitors won’t be able to figure out you’re selling. That might mean the geography is listed as “Florida” instead of your actual city. We are vague about the number of employees and the revenue for the same reason.
Developing the CIM (Confidential Information Memorandum). The CIM is a comprehensive marketing document designed to present the company to prospective buyers with the means and motivation to purchase it. It is shared only after a Non-Disclosure Agreement (NDA) is signed, so it will be seen only by buyers we have screened and vetted. Before we send any financial documents, we ask buyers for information. We assess their business experience and their financial viability. We might also ask for proof of funds to ensure they have the means to secure financing for the deal.
Sending the marketing information to our database of buyers. We have a network of buyers, both strategic and Private Equity, from whom we have collected information. We know what they’re looking for in an acquisition, and we may even have done deals with them in the past. We also have some new contacts who might be interested; it’s our job to weed out tire-kickers and those who might not be qualified to make a serious offer. We send out NDAs to the buyers, and when they’re returned, we send the CIM.
Fielding questions from the serious prospects. Another important function we serve is making sure there’s competition to buy your company. Getting one offer for your business may seem like a good thing, but you’ll never know if you’re getting full value until you have several offers to compare. Often, prospective buyers call us for advice on how to make their offer more competitive. Price, terms, owner financing, and owner engagement after the sale are all considerations that might be included. We do our best to ensure that every offer you receive is the best one a buyer could make. When we talk to buyers, we tell them to lead with their highest and best offer; they understand that the seller has options and can simply move on to the next buyer or better terms. Having multiple bids for the business saves the seller time and resources they might otherwise spend negotiating with one buyer at a time.
Reviewing offers and organizing them to present to the seller. We make sure the offers we present to you are viable and don’t include any clauses that aren’t in your best interest. If there is any cause for concern, we’ll inform you, explain its potential impact, and help you prepare to negotiate it when the time comes.
The diligence process and negotiation can take up a lot of an owner’s time. But getting the process started and keeping it confidential is part of how a broker earns their fee. Although there’s a lot of activity during the early weeks of a listing, very little of it requires the seller’s involvement. That means you can keep your focus on what matters: running your business, remaining profitable, and taking care of your customers. When we have a pool of serious buyers who have made serious offers, we’ll present them and help you sort through them to understand the pros and cons of each.
