Prospective Seller Foil Set 03 29 09

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Introduction to myself and the profession of business brokerage addressing key issues of concern for owners of privately held businesses who are considering divesting their business.

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  • Prospective Seller Foil Set 03 29 09

    1. 1. Business Owner <ul><li>Harry Mink - Business Intermediary </li></ul>
    2. 2. Topics for Discussion <ul><li>Harry Mink & Alpha Background </li></ul><ul><li>-business types sold </li></ul><ul><li>-current projects </li></ul><ul><li>Considerations when Selling a Business </li></ul><ul><li>-business metrics </li></ul><ul><li>-role of intermediary </li></ul><ul><li>-steps in selling process/time frames/issues </li></ul><ul><li>-closing team/CBI benefits </li></ul>
    3. 3. Harry Mink, CBI <ul><li>From Erie, PA & 1975 Moved to MA from CA </li></ul><ul><li>Married - 4 Grown Daughters/3 Sons-in-Law/3 Grandchildren/Live in Acton, MA </li></ul><ul><li>San Jose State -1964 Chemistry/Psychology </li></ul><ul><li>Optical Emission Spectroscopist 1965-1969 </li></ul><ul><li>Analytical Inst Sales & Marketing 1969 - 1983 </li></ul><ul><li>High Tech Start-Up 1984 </li></ul><ul><li>High Tech S/W Sales & Marketing 1984 – 1999 </li></ul><ul><li>Founded Alpha Business Group 2000 </li></ul>
    4. 4. Alpha Business Group <ul><li>Founded in 2000 in Acton -8 Years Brokerage Experience </li></ul><ul><li>-”Main Street” – 63 (<$1M) </li></ul><ul><li>-”Low End M&A” – 4 (>$1M) </li></ul><ul><li>2006 Affiliation with NEVRG/MBA – 22 Years Brokerage & Appraisal Experience </li></ul><ul><ul><li>-Over 400 Businesses Sold “Main Street” as well as “Low End M&A” </li></ul></ul>
    5. 5. Alpha’s Wide Range of Clients <ul><li>Since 2000 </li></ul><ul><li>(over 60 transactions) </li></ul><ul><li>*Furniture Consignment *Ribbon Mfg </li></ul><ul><li>*Beauty Salon *Moving & Storage </li></ul><ul><li>*PC Service *Precision Machine Shop </li></ul><ul><li>*Pizza Shop *Closet Mfg </li></ul><ul><li>*High Volume Liquor (RE) *Dog Walking </li></ul><ul><li>*High End Construction *Used Car Sales & Repair </li></ul><ul><li>*Flower Shop *Jewelry Store </li></ul><ul><li>*Coffee Shop *Bar/Café (RE) </li></ul><ul><li>*Listing/Buyer Referrals *Ice Cream Parlor </li></ul><ul><li>*Lawn Feed *Food Testing Lab </li></ul><ul><li>*Early Child Education *Commercial Locksmith </li></ul><ul><li>*Vending Route *Carpet-Upholstery Cleaner </li></ul><ul><li>*Fish Market *Lawn Maintenance </li></ul><ul><li>*Lamp Shop *Shapes Franchise </li></ul><ul><li>*Bike Shop *Auto Glass </li></ul><ul><li>*Steel Ring Mfg *Gift Shop </li></ul><ul><li>*Wedding Photography *Bridal Shop </li></ul><ul><li>*Children Activity Center *Lobby Shop </li></ul><ul><li>Coin-Op/Dry Cleaners *Nice Manufacturing </li></ul>
    6. 6. Alpha’s Current Listings <ul><li>Unpublished </li></ul><ul><li>Resort Retail Shop . . . ..$450,000 </li></ul><ul><li>Well & Pump Co . . . . . .$800,000 </li></ul><ul><li>Niche Mfg. . . . . . . . . . $3,000,000 </li></ul><ul><li>Furniture Wholesaler. .$5,100,000 </li></ul>
    7. 7. 2008 Statistics Tom West Business Reference Guide 100 10 >$50M 1 >$50M 22K 50 10 <$50M 2 $10-$50M 90K 33 20 <$10M 10 $2.5-$10M 566K 25 20 <$2.5M 12 $1 - $2.5M 690K 20 20 <$1M 21 $500K-$1M 1.2 M 20 20 <$500K 55 < $500K 3.1 M % that Sell % for Sale Sell for % of Businesses Annual Sales # of Businesses
    8. 8. A Saleable Business <ul><li>Motivated Seller </li></ul><ul><li>-compelling reason to sell </li></ul><ul><li>-plan for what’s next </li></ul><ul><li>Gross Annual Sales > $500K+ </li></ul><ul><li>-also need positive growth trend </li></ul><ul><li>Pre-Tax Net to Owner > $100K </li></ul><ul><li>-direct earnings + discretionary perks </li></ul><ul><li>Employees . . . 3 or More </li></ul><ul><li>-need infrastructure in place </li></ul><ul><li>Fair Market Lease –or- Clean Sale of RE </li></ul>
    9. 9. Role of an Intermediary <ul><li>Provides confidentiality </li></ul><ul><li>Educates all parties on process </li></ul><ul><li>Create customized marketing package </li></ul><ul><li>Executes strategic marketing plan </li></ul><ul><li>Act as buffer for emotions </li></ul><ul><li>Provides negotiation skills </li></ul><ul><li>Facilitates process from start to finish and works closely with Owners Advisors </li></ul>
    10. 10. The Steps to Selling A Business Close! Review Final Documents LOI or offer to purchase Present CBR /Data Package Prepare 1-Page Business Summary Definitive Purchase Agreement Facilitate Negotiations Sign Nondisclosure Agreement Prepare CBR /Data Package Assist in Resolving All Issues Motivate Buyer to Act – Offer to Purchase Determine Buyer Interest Determine Value and Assets to be Sold Lender Introductions Probe Buyer Interest Qualify Buyer Recast Your Financial Statements Loan Request Package Tour Business Distribute 1-Page Business Summary Gather Your Data Coordinate Due Diligence Buyer Visit First Meeting Activate Buyer Search Plan Plan for Selling CLOSING DEAL MAKING SEARCH PLANNING
    11. 11. How Long Does it Take to Sell?
    12. 12. Exit Planning <ul><li>There are many ways to get out of a business </li></ul><ul><li>DWAP – death without a plan </li></ul><ul><li>Carefully liquidate </li></ul><ul><li>Fire sale </li></ul><ul><li>Give it to their children </li></ul><ul><li>Sell to key employees/ESOP </li></ul><ul><li>Sell to a third party </li></ul>
    13. 13. Maximize Value Through Selling <ul><li>Best Way to Accommodate Owner’s Goals </li></ul><ul><ul><li>Work with Business Owner’s Team </li></ul></ul><ul><ul><ul><li>CBI, CPA, Attorney, CFP & Other Business Advisors </li></ul></ul></ul><ul><li>Find right buyer by finding all buyers </li></ul><ul><ul><li>High net worth individuals </li></ul></ul><ul><ul><li>Strategic buyers </li></ul></ul><ul><ul><li>Financial buyers </li></ul></ul><ul><li>Realize the full worth of the business </li></ul><ul><ul><li>Price and structure </li></ul></ul>
    14. 14. Difficulties Sellers Encounter <ul><li>Valuing the business </li></ul><ul><li>Keeping it confidential </li></ul><ul><li>Marketing </li></ul><ul><li>Structuring the deal </li></ul><ul><li>Financing </li></ul><ul><li>Preparing documents </li></ul><ul><li>Negotiating </li></ul><ul><li>Timing </li></ul><ul><li>Dealing with buyers </li></ul><ul><li>Remaining objective </li></ul><ul><li>Running their business AND selling their business </li></ul>… when trying to sell their own business
    15. 15. Closing Team <ul><li>Certified Business Intermediary - QB </li></ul><ul><li>Business Attorney </li></ul><ul><li>CPA </li></ul><ul><li>CFP </li></ul><ul><li>Bank, Non-Bank &/or SBA Lender </li></ul><ul><li>Consultant &/or Coach </li></ul>
    16. 16. Thanks for your time & attention! Presented by: Harry A. Mink, CBI Alpha Business Group

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