The SellMyCompany advantage - The process of selling your business

1. George & Company 65 James Street, Suite 208 Worcester, MA 01603 508 365 7703 1/31/2012

2. • Thank you for considering us!
We Know How You Feel - We’ve Been on Your Side of the Table
How many Mergers & Acquisitions companies do you know where the Principals have successfully
owned small and medium-sized companies and has successfully managed a large regional company as
well? George & Company is one of those Merger & Acquisitions companies. We talk the talk, but have
also made that walk many times, and we understand in detail ALL of what is involved in successfully
leaving the closing table for greener pastures.
We Have the Right Experience and Connections
George & Company is one of the oldest and most respected business brokerage, M&A and appraisal
firms in the New England area. Located in Worcester, Massachusetts, we stand ready to serve your every
need in the business acquisition or divestiture market. With over 30 years of experience, George &
Company will aid you in appraising the value of your business and generate a marketing plan to seek out
and attract the right buyer at the right price with the right terms.
George & Company 65 James Street, Suite 208 Worcester, MA 01603 508 365 7703 1/31/2012

3. • Credentials
• Our credentials are very long and can be viewed at:
http://www.georgeandco.com/bios and www.sellmycompany.org/about
• Testimonials can be viewed at:
http://www.georgeandco.com/testimonials and http://sellmycompany.org/testimonials/
• Our Marketing Network
• We put a full-court press on marketing your company:
NEBBA IBBA Buyer Database CPA’s
MANTA Linked-In MLS Axial Market
BizBuySell MergerNetwork BusinessMart BusinessBroker.net
BizMatch Corporations4Sale.com Buy-A-Business.com BizMatch.com
BusinessesForSale.com Out Lender Database Our Colleagues Out Attorney Database
The March Group High Net Worth Indiv. Private Equity Groups (PEGS)
George & Company 65 James Street, Suite 208 Worcester, MA 01603 508 365 7703 1/31/2012

4. successfully owned 22 small and
medium-sized companies
George & Company 65 James Street, Suite 208 Worcester, MA 01603 508 365 7703 1/31/2012

5.  WHAT IS THE PROCESS?
 Selling your company is nothing like selling commercial real estate. Confidentiality is key. No one, including vendors, customers
and staff should know that the business is for sale, unless of course you feel they may be an acquisition candidate. Here is a
general timeline for reaching the closing table:
 Make the Decision to Sell – 1 month
 Partners, shareholders, family members may/must be consulted with.
 Assemble your team – 2 weeks
 In addition to George & Company, your CPA, attorney, and personal financial planner should all be involved from the
beginning. There will be tax and legal (in addition to the obvious) financial ramifications from the sale that must be
determined and planned-for in advance.
 Determine the value of the business – 2 weeks
 Depending on the size and type of your company, we will need to perform a detailed appraisal to arrive at the EBITDA and/or
SDE of your business.
 Recasting: To change the company financial statements from tax basis to economic terms. All businesses have add-
backs; income and expenses that are either personal, non-recurring, or non-operating (depreciation) that must be
accounted for in the appraisal. All of these items must be removed to arrive at true economic earning power of the
business. A site visit and client assistance is usually required in this step.
 Review the Appraisal and decide on the asking price – 1 week
 Clean up the balance sheet – 1 month
 Identify uncollectible account receivables and outdated inventory. If a potential purchaser uncovers these items during due
diligence, the potential purchase may think that you are hiding things and lose interest in the transaction. If your company has
surplus assets or the assets are not fully used, take appropriate action now. The selling price is not likely to reflect these assets.
Remove personal items not related to the business. Adjust for correct FF&E (Furniture, Fixtures & Equipment). If the balance
sheet is not cleaned up until due diligence, it could kill the deal. Examples include: lease escalation clauses, deposits from
customers, and legal threats.
George & Company 65 James Street, Suite 208 Worcester, MA 01603 508 365 7703 1/31/2012

6. The Process Part II
 The Process of Selling Part II:
 Prepare marketing materials and action plan – 2 weeks
 The first step is preparing a CBR (Confidential Business Review), which will obviously require your input. The CBR is
very comprehensive, including an Executive Summary, Company History, full detail of products/services, Marketing and
Sales, Operations, Facilities, Management and Staff, Recasted Financial Statements and much more – usually 15 to 20
pages long. Once we complete the CBR we will send to you for review, modifications, and final approval.
 1 Week:
 Submit a Web Blurb to all registered buyers in the George & Company database (currently 2,200). The Web Blub
is a one-page teaser that touches on all the top-level selling points of your company. Click here for an example.
With your assistance we put together a list of potential acquirers, including vendors, customers, competitors,
friends, private equity groups, synergistic companies operating within your industry, etc.
 1 Week to 1 Year:
 This is a very wide range because it is now up to the prospective buyer to decide whether your company is
attractive enough to pursue. Generally, we will receive numerous inquiries from our Web Blurb. Following is the
process on managing inquiries:
 Ask for a completed Confidentiality Agreement (CA)
 Determine if the candidate is qualified – if the candidate appears to be in your industry, we will send you the
name and ask permission to send the CBR out
 Send the CBR to the candidate – update the database for tracking the candidate
 Answer preliminary questions and potentially arrange a conference call with the client
 Facilities tour with the candidate
 Receive Letter of Intent (LOI) and negotiate an Agreement
 Post-LOI Due Diligence by Candidate which will include more Client meetings
 Candidate secures financing
 Closing
George & Company 65 James Street, Suite 208 Worcester, MA 01603 508 365 7703 1/31/2012

7. The Process Part III
 The Process of Selling Part III:
 Recognize Deal Breakers
 Many deals do not happen even after there is an agreement on price.
 Examples include:
 Due diligence uncovers an undisclosed material fact that should have been disclosed.
 Seller has higher than anticipated taxes.
 Seller has second thoughts about selling (Seller’s Remorse) – it happens often, so please be sure you are ready to pull
the trigger as we WILL find you the right Buyer.
 Because information is slow in getting to buyer (most likely because it was not prepared beforehand), the buyer walks
away.
 Buyer cannot finance the deal.
 The buyer and seller do not get along. Emotions are not kept in check.
 The details of the definite purchase agreement contain unacceptable details. These may include: reps and warrants,
collateral requirements for note, and personal guarantee requirements.
 The actual financial results for the quarter/month right before closing are not as good as expected; consequently the
buyer gets cold feet and withdraws.
 Professional interference (Ex. Seller's CPA may lose a long term client if client sells.)
 More reasons than can be listed here
Please be prepared to answer critical questions both verbally and in writing. The CBR should answer many questions such
as: Are the add-backs justified? Is the business dependent on the owner? How much Goodwill is involved? What is the
Client Concentration? What are the SWOTS? Why is the seller selling the business?
George & Company 65 James Street, Suite 208 Worcester, MA 01603 508 365 7703 1/31/2012

8. Recasting the Tax Returns and Financial Statements
Why?
To change the company’s financial statements from tax basis to economic terms.
Owners want to pay the least tax payable
Brokers and buyers need to understand the true economic performance
Recasting creates a view of the assets that are being transferred and the earning capacity of the business
What is available to the buyer to pay a living income, make the debt service, and have some return on investment
The process is difficult because many non-operating, non-recurring, and personal items are buried or mislabeled in
the statements
The goal:
To arrive at SDE (Seller Discretionary Earnings)
The earnings to the owner(s) before taxes, interest, non-operating and non-recurring income/expenses, depreciation,
and one full-time owner’s compensation.
Owners compensation is measured per industry average, not the actual compensation of the owner of the
company being evaluated
Typical items that require adjustment:
Operating Expenses:
Owner’s compensation (salary, bonuses, payroll taxes, pension & profit sharing, health & life insurance)
Rent (arm’s length cost, market rate)
Owner’s personal expenses (vehicles, T&E)
Other (relatives on payroll, workers not on payroll)
Non-Operating Expenses:
Depreciation
Interest
Personal Property
Unrecorded Expenses
Year-end bonuses, bad debt, commissions
Imminent Changes
New big client, Loss of big client
George & Company 65 James Street, Suite 208 Worcester, MA 01603 508 365 7703 1/31/2012

9. Summary Summary
George & Company 65 James Street, Suite 208 Worcester, MA 01603 508 365 7703 1/31/2012

10.  Please confirm the true motivating factors for choosing to exit
at this time.
 This will help us understand your needs, goals, and perhaps
more importantly, find the right buyer and structure the right
deal.
George & Company 65 James Street, Suite 208 Worcester, MA 01603 508 365 7703 1/31/2012

11. George & Company 65 James Street, Suite 208 Worcester, MA 01603 508 365 7703 1/31/2012

12. Thank You
for your
consideration!
George & Company 65 James Street, Suite 208 Worcester, MA 01603 508 365 7703 1/31/2012