“Few Owners These Days Can Sell Their Firm”…We borrowed this headline from a recent Wall Street Journal article (March 8, 2012), which touched upon some interesting issues that we constantly experience with business divestiture. However, we will modify it to “Few Owners These Days Can Sell Their Firm Without Realistic Expectations.”
Most of the success in business exit strategies can be attributed to the expectations of the sellers. Preparing sellers for the many aspects of the transaction and being realistic, and based on the market is critical for success. “Many are not willing to evaluate their situations realistically,” explains Bob Dolan, South Florida business broker and President of Dolan Sales, Inc.
Business Evaluation – Knowing What to Expect
We have experience with sellers who have a high concentration of sales from just a few customers and expected full up-front payment, or sellers with dramatically reduced sales, and expected to be paid for their business’s past performance. The fact is the transaction has to make sense to the buyers and the bank that will fund the transaction. At the same time, it has to provide sellers with the best price and terms possible.
“Essentially, a properly prepared asking price valuation range remains the foundation when selling a business” explains Dolan. Without recasting the financial results, and establishing an asking price range, owners have no baseline for a negotiation position.
Dolan Sales is Here for You
Recognizing the importance of establishing an asking price range, Dolan Sales, Inc. will ‘give back’ to their customers with a high-value, confidential, complimentary business evaluation and analysis.
“This is an excellent way to ascertain a preliminary value range,” says Dolan. “Potential sellers who are pondering whether or not to sell can obtain some early decision guidance.”
With over 30 years of experience, Dolan has learned that these consultations have high value and are a seamless way to move a business owner’s objective one step closer to divestiture. Quite often, sellers simply have pushed the retirement and business transfer process out too long, and not taken the actions that a profitable business needs to take in order to survive.
Beyond the assessment of establishing a reasonable asking price range, the exit strategy is addressed including pre-qualifying the business and potential buyers for SBA financing so the sellers will receive all, or mostly all cash at closing. Additionally, the “packaging” of the business is discussed, as well as where and how potential buyers are prospected and how confidentiality is maintained and as a top priority. Contact South Florida business broker Bob Dolan for a complimentary business evaluation.