The time has arrived. You are now ready to take your business to market! You know what you want from your business and in your life and are making those a reality.
With the help of experienced professsionals—our team of small business experts—you have:
- addressed the actions that add value;
- determined the most probable selling price;
- completed the structuring and tax planning to minimize taxes when we sell;
- addressed risk mitigation, insurance and future financial and investment issues;
- joined a peer counseling group and are building a better business and a richer life.
It is time to put together a marketing package and plan, ensuring confidentiality is maintained and that all materials are accurate. So while our professionals have expertise in marketing, it is your responsibility as the business owner to review their work in detail.
Strategic marketing and buyer screening
A business broker will produce three documents: A Blind Profile, a Confidential Business Overview and a Confidential Business Profile.
A Blind Profile (BP) will provide sufficient information for a prospective purchaser to determine if they are interested, but not enough for them to identify which business it is. Read this document carefully to ensure it doesn’t reveal anything that will allow a competitor to recognize the business.
The Confidential Business Overview (CBO) will give prospective purchasers a sufficiently specific understanding of the business so they can direct appropriate questions about it when we meet with them. This document will provide detailed information about the history, market, services and products, structure, staff, clients, suppliers, physical plant and equipment, tools, systems, processes—just about everything a prospective purchaser would want to know about our business, including its strengths, weaknesses, threats and opportunities. It will, however, contain only summary information about financials.
The CBO will be released after a prospective purchaser has verified that they have interest, ability and financial resources to purchase and successfully operate the business and after they have signed a confidentiality agreement, having been interviewed and educated by a business broker so they understand the process and the steps involved.
The Confidential Business Profile (CBP) will contain everything that’s in the CBO plus a detailed financial analysis of the history and future projections. It will include financials as reported, as well as normalized or recast financials illustrating the ability of the business to
- a) provide an income for the purchaser, b) do the debt servicing to pay for the business, and c) provide a reasonable return on their invested capital.
The CBP will be provided to the prospective purchaser only after they have met with us and only if after that meeting they have a real desire to acquire the business and we have decided they would be a suitable purchaser.
Positioning your business
Properly positioning your business in the mind of a prospective buyer is critical. Providing a buyer with detailed financials before he or she has fallen in love with the idea of owning the business will put them into an analytical state of mind that is predisposed to disqualify our business as a suitable acquisition.
But once a prospective buyer has fallen in love with the vision of owning our business, they will be scrutinizing the detailed recast financials and projections to rationalize their decision to purchase to their peers, friends and family.
Our business broker will use radio, newspapers, social media, email, web sites, seminars and other marketing channels to attract buyers for the business.
Prospects are then put through a detailed intake process to determine what businesses would work best for them given their interests, skills, lifestyle goals, financial resources, passions, values, experience, energy, and so on. This weeds out “tire-kickers” and ensures that the buyers they bring to meet us are serious candidates.
Our focus needs to be on running our businesses to keep them in top shape while our broker is selling them for us. We have already cleaned up our documentation and financials and are ready for scrutiny.
Originally published in At the Broker's Table.
If you are serious about selling your business and you want the sale to be managed as expediently, professionally, and profitably as possible, you owe it to yourself to spend some time with a Sunbelt representative.
Please contact the closest Sunbelt office at your convenience to speak with one of our representatives, who will be glad to answer any additional questions you may have.
In this private and confidential interview we can provide further insights that will help you determine if your business is ready to sell and if your sales expectations are realistic.