so you re thinking about selling your business n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
SO YOU’RE THINKING ABOUT SELLING YOUR BUSINESS PowerPoint Presentation
Download Presentation
SO YOU’RE THINKING ABOUT SELLING YOUR BUSINESS

Loading in 2 Seconds...

play fullscreen
1 / 18

SO YOU’RE THINKING ABOUT SELLING YOUR BUSINESS - PowerPoint PPT Presentation


  • 112 Views
  • Uploaded on

SO YOU’RE THINKING ABOUT SELLING YOUR BUSINESS. PREPARATION IS KEY SBDC Webinar – December 19, 2013 Mike Schoville, President, The Business Brokers, Inc. TOPICS. Maximum price Cash flow Valuation Tax returns Built to sell Steps for a saleable business Sales Process Timing.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'SO YOU’RE THINKING ABOUT SELLING YOUR BUSINESS' - orsen


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
so you re thinking about selling your business

SO YOU’RE THINKING ABOUT SELLING YOUR BUSINESS

PREPARATION IS KEY

SBDC Webinar – December 19, 2013

Mike Schoville, President, The Business Brokers, Inc.

topics
TOPICS
  • Maximum price
  • Cash flow
  • Valuation
  • Tax returns
  • Built to sell
  • Steps for a saleable business
  • Sales Process
  • Timing
  • Planning: why is it important
  • When to start planning
  • Who can help
  • Succession options
  • Most appealing
  • Least appealing
  • Likely buyers
  • Financial options
planning why is it important
PLANNING: WHY IS IT IMPORTANT
  • To maximize the business value
  • To control the outcome
  • To attract quality buyers
  • To continue the business’ longevity
when to start planning
WHEN TO START PLANNING
  • Ideal: When starting business
  • Minimum: 3 years before selling business
    • Financials, tax returns
    • People
    • Market
    • Products
    • Information
    • Competition
    • Capital expenditures
who can help the cost
WHO CAN HELP & THE cost
  • Accountant
  • Lawyer
  • Business Coach
  • Banker
  • Small Business Development Center
  • Board of Directors
  • Mentor
  • Twenty Group
  • Broker
succession options
SUCCESSION OPTIONS
  • Liquidate
  • Hand off to family, friends or employees
  • Sellto a third party
most appealing best price
MOST APPEALING-BEST PRICE
  • Buyers understand
    • Retirement
    • Burnout
    • Health issues
    • Internal disputes
    • Changing career/lifestyle
    • Spouse request
    • Divorce
  • Upward trends
  • Good bookkeeping
  • All revenues included
  • Few add backs (EBITDA)
  • Business documentation
  • Key employees
  • Business runs without you there
less appealing lower price maybe unsaleable
LESS APPEALING-LOWER PRICEMAYBE UNSALEABLE
  • Buyers don’t like
    • Declining revenues
    • Downward trends
    • Lost market share
    • Obsolescent product or service
    • Lots of add backs
    • Cash not recorded
    • High customer concentration
    • Need for large capital expenditures
  • New dominant competitor(s)
  • Low barrier to entry
  • No business documentation
  • Employee turnover
  • Only owner decision making
  • Owner integral part of business
  • Location
likely buyers positives and negatives
LIKELY BUYERSPositives and Negatives
  • Relatives
  • Employees
  • Newbie
  • Competitors
  • Market expert
  • Equity group
  • Synergistic acquirer
financing options
FINANCING OPTIONS
  • Cash
  • Bank financing
  • Seller financing
  • Combination
  • Earn Out
cash flow
Cash flow
  • What is it
  • How is it calculated
  • Why is it important
  • Used to determine price
  • The higher the cash flow, the higher the multiple
valuation
VALUATION
  • Cash flow versus asset value
  • Three important ingredients
    • Can the buyer repay debt
    • Is there a debt service cushion
    • Is there adequate remaining cash flow for the buyer
tax returns
TAX RETURNS
  • Why they are important
  • Diametrically opposed goals
  • Minimum 3 years before selling
how to tell if your business is built to sell
HOW TO TELL IF YOUR BUSINESS IS BUILT TO SELL
  • Go on vacation
  • Then go on a 3 month sabbatical
  • Acid Test – how did it perform?
  • Build up to – 3 months away – not negatively impacted
steps for sellable co
STEPS FOR SELLABLE CO.
  • Employees trainable & trained
  • Valuable to your customers, not commoditized
  • Repeatable, so customers repurchase
slide16

Sales Process

Market & Promote

Prepare Offering Documents

.

List Business

No Cost – No Obligation Evaluation (Pricing)

Tour

Confirm interest, answer questions

Present Offering

Buyers ConfidentiallyQualified

Offer / Acceptance

Financing

Due Diligence

Document & Agreements

Well Deserved Vacation

After Sale Training

Clo$ing

timing
TIMING
  • Simple Economics of Supply & Demand suggests for sellers: Sell when few are selling
  • Expect to see more aging baby boomers sell their business in the next few years compared to the last few years
    • Profitability trending upward
    • Banks back in the market looking for transactions
  • Buyers need to have the financial strength and the relative experience
questions
QUESTIONS

Mike Schoville

The Business Brokers, Inc.

3050 SE Enterprise Drive, Suite B

Grimes, IA 50111

Office: 515-986-6056

Cell: 515-306-8487

mschoville@tbbinc.com

www.tbbinc.com