DETERMINE OBJECTIVES

What are your needs and objectives? Options include; sell and retire; sell and remain with the company on a management contract; use capital to buy different business. Thinking through what you are going to do once you have sold is an important part of your exit strategy.

COLLECT INFORMATION

You must gather financial, as well as general information, on all aspects of your business. Proper preparation is crucial for the best presentation of your business and is also the first step in establishing the confidence of a buyer. Adequate information will enable a buyer to gauge their level of interest.

MAXIMIZE FINANCIAL PRESENTATION

Financial statements are prepared for tax purposes. A buyer must be educated to accurately interpret the "recast" financial statements in order to recognize your Company's true worth. The recasting of financial statements requires identifying and adjusting for normalized owner's salary and fringe benefits, as well as one-time, non-recurring and non-applicable expenses.

VALUATION

Determining the fair market value of your business is an involved procedure, which takes many variables into account. Proper consideration must be given to your company's strengths, assets, historical financial performance and projections, along with the many intangibles inherent in your Company. Purchase price comparisons should be made with like companies that have sold within your industry. By determining the highest price a fully informed Buyer is willing to pay for your Company, you will avoid the risk of losing a timely sale by overpricing your Company, or "leaving money on the table" by undervaluing your business.

PREPARATION OF CORPORATE PRESENTATION

The business must be properly packaged will all applicable records and facts organized and documented. This ensures presentation in its most favorable light, while providing the acquirer with a concrete document to follow and review. This package educates buyers on the many intangibles inherent in your Company, hence raising the perceived value to the Buyer. These intangibles include name recognition, market niche, vendor relationships, operation and production systems, distribution channels, customer loyalty, trained and skilled employees, and many more.

BUYER IDENTIFICATION

Determine your strategy for bringing the Company to market. What type of buyer will perceive the greatest value and synergies in your business? Identifying the "right" buyer for your business can significantly impact its' final selling price

CONTINGENT ISSUES

Identify and be prepared to address issues such as leases, regulations, licensing, key employees or other concerns that might apply to your specific situation. Failure to address these issues early on in the process can potentially lead to the loss of qualified buyers along with months of wasted time.

MARKETING STRATEGY/CONFIDENTIALITY

Determine the most likely type of buyer and how to best market the business, while maintaining confidentiality. There are a number of different marketing strategies available, which will provide the necessary exposure while maintaining strict confidentiality. There are steps you should take to guard against your competitors, employees, vendors and customers finding out about the pending sale of your business. Be sure to talk to your Intermediary/Broker about these issues.

PRE-QUALIFICATION

A highly important part of the Sale process is qualifying potential buyers as to their interest level, management skills, cultural fit and ability to meet financial requirements for the transaction. Maintaining confidentiality with any interested buyers, until all of these aspects are addressed to you complete satisfaction is of utmost importance.

SITE-VISIT

Provide the potential Buyer with the opportunity to visit your facility. Generally there are multiple site visits. This is a good forum for the Buyer and Seller to develop a favorable rapport. All site visits are pre-arranged with the Seller by the Broker who also attends the meetings.

PURCHASE OFFER/NEGOTIATION

Upon the "meeting of the minds" as to the key issues, a written offer to purchase, generally in the form of an Earnest Money Offer to Purchase, should outline the purchase price, terms, conditions and any contingencies. Proper compliance with this step can save thousands of dollars in legal expenses.

DUE DILEGENCE

The offer is usually contingent on the Buyer's professionals verifying the accuracy of the Seller's financial and operational representations.

CONTRACTS

After all issues are resolved and the Buyer's accountants and attorneys are satisfied with your representations, your attorney or ours will prepare a final contract of sale for the review and acceptance by the Buyer's legal representatives.

CLOSING

This is the point at which you can be assured that you have realized your goal. The closing takes place at various locations depending on who is involved in the transaction. It is attended by both parties and their represntatives along with the banker and/or title company if necessary.

TRANSITION PERIOD

This typically involves a period of cooperation in which you will assist the new owner in making a "seamless" transition. This includes transferring of key relationships and proprietary information needed to successfully operate the business.