Negotiation of Purchase and Sale

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Selling a business is one of the most important decisions a business owner will make. Currently if a business owner decides to sell his or her business, the choices are; try sell it himself or herself, use a business broker or consultant, use an accounting firm or use a realtor.

  1. "When should I sell my business?"                                                                                                                   
    If you are physically or emotionally having difficulty operating your business, tired of operating full time or financially secure you should consider selling your business. One significant consideration is to sell when cash flow is good and you have a large base of active clients. At times like these your valuation and selling price will be highest.       

  2. "What is my business worth?"          
    An appraisal of your business, by a qualified, NAI Valuator, is critical to successful business sales. An experienced professional will help you establish a price that is fair to both the buyer and the seller. "Rules of Thumb" for establishing the selling price of a business is dangerous, because if two businesses are producing the same dollar volume, but with a different cost base or overhead, it is obvious that the two businesses should not and cannot be sold for the same amount. Lending institutions will not make loans based upon rules of thumb. 

  3. “Do I need a broker in order to sell my business?”     
    No. Many business sales are handled by the owner himself; however, the advantages of using a an NAI Mergers and Acquisition specialist are many, and most business owners find that their transition is handled more efficiently by using a professional. Most businesses sold by a professional will bring a more favorable price to the seller than if handled by an individual with no experience in fine tuning a business sale. Additionally statistics indicate that over 50% of businesses selling transactions handled by owners have transactional problems.  

  4. “What can a professional broker do for me?”            
    NAI can find and qualify a buyer to whom your business may be presented. The broker will help market the business to potential buyers in a manner that presents the business in its best interest. NAI also act as facilitators in any negotiations that may be necessary in selling the business, which helps remove the concerns and emotions from the negotiating table. The assistance brokers may provide in the development of contracts, and the consulting processes with attorneys and accountants is invaluable. It is a wise person who surrounds himself with knowledgeable people when dealing in areas he does not fully understand.    

  5. “Will I have to carry the note myself, for the business sale?”                
    It is usually not necessary for the seller to be the financier for the business sale. NAI has a good business relationship with many lending institutions that specialize in financing professional business sales. Many of these companies will provide the financing necessary to purchase a business, and will do so with terms, which allow the buyer to maintain an effective cash flow.         

  6. "How do I sell half my business to my associate?"    
    It is not advisable sell any share to anyone at any time. Sell 100 per cent. This is tough advice for some, but I highly recommend that you follow the most successful type of business over the past 50 years: sole proprietorship. Experience demonstrates that small to medium business success is most successful in this time-tested model and it will continue to be the best system for the next 50 years. Cost-sharing, group business, partnerships and other forms of business structure are interesting, challenging and can be successful for the right personalities. However, according to statistics, 73 per cent of all businesses are still sole proprietorships and there is a reason for that: it works best for most.

     

Position Your Company For Sale

NAI professionals will assist you to position the business for sale properly. Company positioning is similar to attitude in that proper positioning will produce positive results just as a positive attitude produces a richer and fuller life. Because it is virtually impossible to view oneself truly objectively, positioning should be left to a professional. To properly position a company for acquisition the following steps must be taken:

1.            Objectively determine the company's strengths and weaknesses;
2.            Identify the firm's uniqueness and hidden values;
3.            Understand the subjective environment that surrounds the business;
4.            Research and gather data and information from outside sources to substantiate and verify opportunity;
5.            Quantify subjective data to give credibility to a projected future value; and
6.            Weave the gathered information into a comprehensive profile of the company and the opportunity the firm represents.

A properly positioned firm sells for a premium price to a person or company able to enhance the operation. The owner receives an optimum price. The buyer acquires an exciting opportunity. Customers, employees and vendors continue their beneficial relationship with the firm.

Obtaining the best price for a business begins with the timely decision to sell. The business owner should be limited to the decision to sell only. Thereafter, professional assistance should be obtained in order to maximize value, maintain confidentiality, and avoid costly mistakes.

Major corporations engage "pros" to enhance the value of their products in the marketplace. Professional athletes have their promoters, actors their agents, public companies their investment bankers. The unfortunate fact that most small to mid-size companies are sold for much less than they should indicates that the owners of these companies need professional assistance in their sales process.


Pricing Analysis (Valuation)

Would you like an idea of what the market value of your business is but are not sure you want to sell at this time? Our professionals can provide an indication of value for your business without you having to go to the extent and expense of a full valuation. Pricing Analysis does not include the detailed analysis, methodology and analysis that are included in a formal valuation but will provide a document with sufficient detail to show what the current market value of the business is at considerably less expense than a full valuation.

We will keep the Analysis on file, update it when you are ready to sell and credit the amount paid off the selling commission when we sell your business!!

Give Alf Sanderson and Delon Cheung a call today and Get Started