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10 Key Points For Selling Your Business
 

10 Key Points For Selling Your Business

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Key points for selling a business that all business owners should know.

Key points for selling a business that all business owners should know.

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    10 Key Points For Selling Your Business 10 Key Points For Selling Your Business Presentation Transcript

    • 10 Key Points ForSelling Your Business Representing business owners world wide from Vancouver, Canada http://www.ck-globalsolutions.com/ +1 604 909-1271
    • 10 Key Points For Selling Your Business• Every year, thousands of middle-market companies change ownership.• Although the reasons for selling may vary, the common goal is maximizing proceeds from the sale.• Far too often, many of these business owners do not realize the full financial benefit from selling their company because they are unprepared.• This is a pivotal financial event requiring planning and the marketing guidance. Representing business owners world wide from Vancouver, Canada Contactus@ck-globalsolutions.com +1 604 909-1271 http://www.ck-globalsolutions.com/
    • 10 Key Points For Selling Your Business• Sellers who are well prepared will be positioned to maximize the potential rewards and minimize the risks by avoiding costly mistakes.• Here are ten key points to remember when preparing to sell your business: Representing business owners world wide from Vancouver, Canada Contactus@ck-globalsolutions.com +1 604 909-1271 http://www.ck-globalsolutions.com/
    • Point 1) Prepare A Formal Exit Plan• Every business owner will eventually exit his or her company – either through a sale, transition or succession.• Many owners are so involved in running their business that they fail to prepare for their eventual exit.• Exit planning takes time and requires a clear view of objectives and careful consideration of options.• A properly designed exit plan protects the net worth of a business owner and maximizes the value of the business. As a blueprint for satisfying personal needs and achieving financial objectives, it places the business owner in control of why, when and how to exit. Representing business owners world wide from Vancouver, Canada Contactus@ck-globalsolutions.com +1 604 909-1271 http://www.ck-globalsolutions.com/
    • Point 2) Seek Professional Advice• Selling a privately held business is often the largest and most important financial event of the owner’s life.• A successful sale of a business requires a carefully planned and methodically structured process to maximize sale price.• Few owners are prepared to navigate this complex process. The right professional intermediary can provide invaluable advice, guidance and representation.• The benefit of experience and an independent perspective can maximize selling price and minimize selling time. Representing business owners world wide from Vancouver, Canada Contactus@ck-globalsolutions.com +1 604 909-1271 http://www.ck-globalsolutions.com/
    • Point 3) Understand The Value of Your Business• Value is not obvious, nor is it constant or consistent. The value an accountant places on a business can vary significantly from its value in an M&A transaction.• One deals strictly with financial statements, while the other considers the many subtleties that determine market value – what buyers will ultimately pay.• One focuses on past performance and the other looks to the future.• It is also important to evaluate off-balance-sheet assets such as good will, customer lists, proprietary technology, brand recognition, strategic strength, future ability to grow and other intangibles. Representing business owners world wide from Vancouver, Canada Contactus@ck-globalsolutions.com +1 604 909-1271 http://www.ck-globalsolutions.com/
    • Point 4) Sell At The Right Time• Choose your exit time and avoid a forced sale due to unforeseen circumstances.• Costly mistakes can allow factors such as illness, age, unplanned retirement and other similar circumstances to dictate timing.• Sell when the market is favorable to maximize business value.• Taking control of the process means being proactive, knowing your personal life objectives, watching the market and seeking the guidance of transition professionals. Representing business owners world wide from Vancouver, Canada Contactus@ck-globalsolutions.com +1 604 909-1271 http://www.ck-globalsolutions.com/
    • Point 5) Have Complete Documentation• Quality documentation is essential to attract the right buyers and answer their questions without delay.• Documentation prepared from the perspective of potential buyers can turn a company’s past into a valuable future.• Complete and well-prepared documentation will present a realistic, defensible foundation for the company’s value and substantiate buyer expectations of future earnings and their return on investment.• It provides a basis for meaningful comparison with other investment opportunities and a compelling view of how the business is likely to perform in future years. Representing business owners world wide from Vancouver, Canada Contactus@ck-globalsolutions.com +1 604 909-1271 http://www.ck-globalsolutions.com/
    • Point 6) Select The Right Buyers• Care is needed with potential buyers you already know, such as vendors, customers and competitors.• Sophisticated industry buyers with strategic acquisition goals are often willing to pay the highest amount due to a strategic advantage to their current operation.• Private equity groups, sophisticated buyers in the business of acquiring companies, foreign buyers and industry strategic buyers are typically the most desirable in realizing optimum value.• It is important to pre-qualify buyers and always use confidentiality agreements before releasing critical business details. Representing business owners world wide from Vancouver, Canada Contactus@ck-globalsolutions.com +1 604 909-1271 http://www.ck-globalsolutions.com/
    • Point 7) Deal With Multiple Buyers• Deal with multiple buyers when possible• Multiple buyers create a competitive environment and a sense of urgency.• Without other prospects, the seller has fewer options and limited leverage to obtain the desired price and terms.• Multiple buyers can help maximize the market value of the business and avoids a single buyer controlling a transaction and weakening the sellers negotiating position. Representing business owners world wide from Vancouver, Canada Contactus@ck-globalsolutions.com +1 604 909-1271 http://www.ck-globalsolutions.com/
    • Point 8) Understand Buyer Motives• Understanding why a particular company may be important to a buyer can be of great benefit to maximize value.• Gaining a clear perspective on how your business is seen in the marketplace by potential buyers is critical.• This helps with correctly pricing your business and setting expectations.• Many corporate buyers use acquisitions as a preferred strategy for achieving expansion goals, improving operating efficiency or increasing profitability rather than building it internally. Representing business owners world wide from Vancouver, Canada Contactus@ck-globalsolutions.com +1 604 909-1271 http://www.ck-globalsolutions.com/
    • Point 9) Emphasize Value, Not Price• Focus on value, earnings potential and return on investment.• A carefully structured marketing plan that properly positions the business in the marketplace, along with accurate and current documentation and access to the right buyers will all help to maximize market value –what a buyer is willing to pay.• Negotiating business value factors such as future earnings potential, dividend-paying capacity, strategic advantages and return on investment are invaluable to maximize market value. Representing business owners world wide from Vancouver, Canada Contactus@ck-globalsolutions.com +1 604 909-1271 http://www.ck-globalsolutions.com/
    • Point 10) Focus On The Future• Focus on future performance, opportunities for earnings growth and strategic advantages.• Emphasize future potential and not just the past performance of the business using multiples or averages that can result in an unrealistic perception of value.• Evaluate the company’s future earnings potential and its ability to produce the desired return on investment.• Explain the past and sell the future. Representing business owners world wide from Vancouver, Canada Contactus@ck-globalsolutions.com +1 604 909-1271 http://www.ck-globalsolutions.com/