Seven Steps To Selling Your Business
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Seven Steps To Selling Your Business

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The ABCs of preparing your self and your business for this next big step.

The ABCs of preparing your self and your business for this next big step.

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Seven Steps To Selling Your Business Seven Steps To Selling Your Business Presentation Transcript

  • Seven Steps to Selling Your Business In A Tough Market! 02/14/12 Presentation by: Larry Greene Mercury Business Brokerage
  • Introduction
    • Purpose of this presentation
      • Objective:
        • Review the preparation steps required for a successful business sale
      • Outcome:
        • Know how your business must appear to attract qualified Buyers
    Mercury Business Brokerage
  • Steps to Freedom
    • Commitment
    • Financial Housekeeping
    • Lower Overhead
    • Get Lean and Mean
    • Paint Up / Fix Up
    • Build a Team
    • Tax Planning
    Mercury Business Brokerage
  • Step 1: Committment
    • Are you ready to let go?
      • Are there family members involved?
      • Is your spouse ready for a change?
      • Seek agreement from these stakeholders
    • Plan for the future
      • What are you going to do next?
    • Are you financially prepared?
    Mercury Business Brokerage
  • Step 2: Financial Housekeeping
    • Income Statement (P&L)
        • Is Uncle George still on the payroll?
        • Is the business still paying for the vacation home?
        • Personal cars
        • Family members cars
        • Personal credit cards
    Mercury Business Brokerage
  • Step 2: Financial Housekeeping
    • Income Statement (P&L)
      • All businesses have these ‘discretionary items’ on the income statement
      • Remove them or categorize them so that they are easy to identify
      • Make sure the P&L is ‘clean’
    Mercury Business Brokerage
  • Step 2: Financial Housekeeping
    • Balance Sheet
      • Make sure all business assets are included
      • Remove all items that are personal assets
      • Remove old items that are no longer used in the business
      • Remove personal loans or ‘Loans to Shareholder’
      • All financial statements should be transparent
      • Don’t make the Buyer guess what is included
    Mercury Business Brokerage
  • Step 3: Lower Overhead
    • Two highest costs are labor and rent
    • Review your operation with a critical eye
    • Has your staff gotten ‘fat’?
    • Reduce payroll in all areas possible
    • Can technology replace labor?
    • Can you outsource certain tasks at lower cost?
    Mercury Business Brokerage
  • Step 3: Lower Overhead
    • Sublease excess space
    • Move to location that better fits your needs
    • Renegotiate your lease
      • Obtain longer term if location is important
      • Additional Lease Option for extra years
      • Necessary to have minimum 10 years for SBA loan
    Mercury Business Brokerage
  • Step 4: Get Lean and Mean
    • Is your sales staff still selling?
      • This is an area that becomes lax most often
      • Review sales salaries/commissions
    • Cross-train staff members to be more efficient
    • A Buyer won’t accept that you ‘really don’t need’ certain staff
    • Review processes to remove unnecessary operational steps
    Mercury Business Brokerage
  • Step 4: Get Lean and Mean
    • Lower Cost of Goods
      • Renegotiate with suppliers for better prices
      • Outsource low margin products/services
    • Review contracts with customers and suppliers
    • Supplier policies may have changed to your benefit
    • Shop liability and health insurance policies for competitiveness
    Mercury Business Brokerage
  • Step 5: Paint Up / Fix Up
    • Remove all old debris from storage and plant
    • Remove unused manufacturing equipment
    • Sell or donate unused office furniture
    • Paint offices
    • Update signage
    • Update collateral material
    Mercury Business Brokerage
  • Step 6: Build a Team
    • Choose your Professional Team
      • Certified Business Intermediary (CBI)
      • Transaction attorney
      • Transaction Certified Public Accountant
      • Financial Planner
      • Insurance Broker
    Mercury Business Brokerage
  • Step 6: Build a Team
    • Have a professional valuation performed by a Certified valuation expert
    • Get an equipment appraisal done by a Certified Equipment Appraiser
    • Discuss typical acquisition scenarios with your Professional Team
    Mercury Business Brokerage
  • Step 7: Tax Planning
    • Start a discussion with a tax expert about the sale of your business
    • Stock sale or asset sale?
    • All cash or seller finance?
    • Start a discussion with your financial planner about handling proceeds from the business sale
    • Not all accountants and attorneys are expert in business sales transactions
    Mercury Business Brokerage
  • Summary
    • Make a commitment
    • Start early
      • Don’t wait until you are ready to sell
      • Time on the market varies, typical 9 to 15 months
    • Clean up everything
      • Financials
      • Staff
      • Office / Plant
    • Find out what your business is worth
    • Plan ahead to pay less taxes upon sale
    • Then, go to market
    Mercury Business Brokerage
  • The Big Payoff
    • For Every Extra
    • Dollar
    • You Add To Your Bottom Line The Value Of Your Business May Increase By
    • Three Dollars
    Mercury Business Brokerage
  • Business Resource Group
    • Thank You for attending our
    • Business Workshop!
    • All information we learn about your business at this workshop is strictly confidential.
    Larry Greene, CBI Mercury Business Brokerage Phone (714) 813-0581 Email: Larry@MercuryBrokerage.com