Aging Workforce Solutions

Selling Your Business

For many business owners, selling their company may be the most important financial decision they ever make. For most, including the many boomer generation owners who are currently approaching retirement, establishing a process to identify the "ideal buyer" can make a significant difference in the success of achieving financial goals for them and their family. it may also impact the future of the business and employees in the successor company.

So, what happens when the defining moment to sell happens, or a buyer comes knocking? It is likely that many of those knocking will be from a Private Equity Group. The PEG community has grown significantly with over $1.0 trillion of available funds and appropriately one half of that available for merger/buyout purposes. Our exit planning specialists have over 4,500 PEGS in their database with 3,400 of them in North America. If you are a business owner, this group of professional buyers is aggressively looking to knock on doors like yours.

So how does someone who is immersed in the day to day operations of their company, and trying to balance family and personal issues, evaluate the worthiness of potential suitors which now become part of the process of "day to day business" - your exit strategy?

We can help.  Our associates have been guiding business owners through their exit process to maximize the value of their business at the time of sale for the past 25 years.

Our process is to identify the ideal buyer most often results in the best offer based on current owners goals for,:

     - Maximizing net proceeds from the sale

     - Positioning the current owner for any role in the company, if desired, post-sale

     - Maintaining a culture in the new company that addresses the role that remaining employees will assume under new ownership, if desired.

The first, and most important step in the process is to identify as many legitimate buyers as possible, as soon as possible. We are in a very HOT market today and buyers are aggressively reaching out to companies to locate opportunities to acquire. We have some of the most sophisticated buyers right here in the US. Private investors and Private Equity Groups (PEGS) are regularly contacting companies to see if they are willing to sell.

Be aware of the following if you are dealing with "One Buyer"

     -No Competition - You really won't know if you are getting the best price.  We always say if you have one buyer, you have no buyers. Competition is a wonderful thing and can be used to up the price.

     -Deal Fatigue - The buyer wearing you down with the tactic to re-trade the deal at a yet lower price after months of dragging it out.  One buyer is in the drivers seat and can let the deal drag on.

     -Sharing vital information at the wrong time - If you have not sold a business before, be concerned about what information is shared at what point in the process. There is a time and a place for everything and there are critical pieces of information that should not be shared until the appropriate time much later in the process.

Your business is successful because your strategic planning guided your company through challenges most business owners face. In the course of managing the day to day have you given consideration to what defines your ideal buyer?

Approximately 70 per cent of our buyers and sellers had no awareness of the existence of the other entity before they engaged our auction process.  Frequently, in the expanding global marketplace, the buyer and seller are not located in the same country. Thus, our process cultivates a set of legitimate prospective buyers, creating competition that frequently results in generating higher sale prices, more up front money and less potential to take a promissory note for any balance.

Case studies are available upon request.

Secondly, evaluating the current status of the company for "flaws" that can be used as negotiating leverage by a prospective buyer can eliminate those objections before they ever develop. Retention of key employees, establishing career paths for succession at all relevant areas in the company (especially where there are multiple generations of workers, creating disparate paths for each of them - this is a big issue among many of our clients) and identifying and addressing regulatory risks are just some of the areas that can solidify the seller's position and take these objections out of the negotiating process . Also, if the sale is defined as one that will involve the current owner and or employees remaining in a functional role in the company, parameters of those roles should be clearly established and where possible, contractually guaranteed.

Thirdly, for the current owner's , and where necessary, their family's benefit, appropriate planning should be given consideration before the formal exit process begins. It is not a deal killer when an owner wants to sell asap. However, our experience over 25 plus years has shown that planning -- tax, estate, and succession -- often leaves the owner, and where applicable, their family and key employees, with greater financial security when the sale is completed. Once the sale process is initiated, opportunities for planning often become limited and can conflict with the goals of current ownership for the sale.

Whether this is the first and only business you will sell, or it is one in a portfolio, we believe we can support the effort with time tested resources to deliver ideal outcomes for everyone - owners, their families, and their employees. Contact us to learn more about how our process has given business owners across the globe results that exceeded their expectations when it is time to make the most important financial decision in their lives.