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Selling & Buying a Business
Presented by:
Mike Stapleton
Stapleton Assets, Inc.
Topics
• Overview of small businesses
• Selling a business
• Buying a business
• Role of a Broker
2017 Statistics
# of
Businesses
Annual
Sales
% of
Businesses Sell for
% for
Sale % that Sell
3.1 M < $500K 55 <$500K 20 20
1.2 M $500K-$1M 21 <$1M 20 20
690K $1 - $2.5M 12 <$2.5M 20 25
566K $2.5-$10M 10 <$10M 20 33
90K $10-$50M 2 <$50M 10 50
22K >$50M 1 >$50M 10 100
Source: Pricewaterhousecoppers
Business Facts
• In the next decade, 35% of small and
medium sized businesses are going to sell
• Source: PricewaterhouseCoopers
• 65% of business owners don’t know the
value of their business
• Source: M&A Today
• 55% of business owners don’t have an
exit plan
• Source: M&A Today
Exit Planning
There are many ways to exit a business:
 Carefully liquidate
 Fire sale
 Give it to your children
 Sell to key employees/ESOP
 Sell to a third party
Maximize Value by Selling
• Best Way to Achieve Owner’s Goals
– Work with transition team
• Accountant, Attorney, and Broker
• Find right buyer
– High net worth individuals
– Strategic buyers
– Financial buyers (private equity, insurance companies, etc.)
– First-time buyers
• Realize the full worth of the business
– Price and structure
• More buyers than sellers - lots of money
• PEGs at all time high: raising/investing money
• Interest rates are low
• Banks lending at higher multiples
• Economy is at peak performance
Timing is Important
The ideal time to sell is when the industry is hot!
“A rising tide lifts all boats.”
*PEG’s = private equity grabs
Seller Difficulties
• Valuing the business
• Keeping it confidential
• Marketing
• Structuring the deal
• Financing
• Preparing documents
• Negotiating
• Timing
• Dealing with buyers
• Remaining objective
• Running their business
AND selling their
business
… when trying to sell their own business
PLANNING SEARCH DEAL MAKING CLOSING
Plan for Selling Activate Buyer
Search Plan
Buyer Visit First Meeting Coordinate Due
Diligence
Gather Data Distribute 1-Page
Business Summary
Tour Business Loan Request Package
Recast Financial
Statements
Qualify Buyer Probe Buyer Interest Lender Introductions
Determine Value and
Assets to be Sold
Determine Buyer
Interest
Motivate Buyer to Act –
Offer to Purchase
Assist in Resolving All
Issues
Prepare CBR /Data
Package
Sign Nondisclosure
Agreement
Facilitate Negotiations Definitive Purchase
Agreement
Prepare 1-Page
Business Summary
Present CBR
/Data Package
LOI or offer to purchase Review Final
Documents
Close!
Steps to Selling A Business
Selling Cycle
0
5
10
15
20
25
30
35
40
'1-3 '4-6 '7-9 '10-12 '12-18 '>19
%Sold
Months
How long will it take to sell?
What Do Buyers Want
• Cash flow
• Diverse customer base
• Growth potential
• Support from seller (1–6 months after sale)
• Reasonable price
• Flexible terms
Steps to Buying a Business
Assess Your
Qualifications
Search For the
Best Business
Make a Deal Close the Deal
Understand the Buying
Process
Identify Business Interest Meet Seller Due Diligence
Determine your
Financial/Credit worthiness
Qualify for
A specific Business
Tour Business Loan Request
Package
Determine your Business
Experience
Review 1-Page Business
Summary
Probe Buyer’s continued
Interest
Find Lender
Identify Licensing Determine Interest Determine whether to Act –
Offer to Purchase
Resolve All Issues
Examine Life style changes Nondisclosure Agreement Enter Negotiations Formal Contract
Identify Geographic
Location
Review CBR
/Data Package
Create and sign LOI or
offer to purchase
Review Final Documents
Close!
Role of a Broker
• Provides confidentiality
• Educates all parties on process
• Creates customized marketing package
• Executes strategic marketing plan
• Acts as a buffer for emotions
• Provides negotiation skills
• Facilitates process from start to finish
Thanks for watching!
Presented by:
STAPLETON ASSETS
Austin, Texas
(512) 200-4501
www.stapletonassets.com

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Stapleton Broker Presentation

  • 1. Selling & Buying a Business Presented by: Mike Stapleton Stapleton Assets, Inc.
  • 2. Topics • Overview of small businesses • Selling a business • Buying a business • Role of a Broker
  • 3. 2017 Statistics # of Businesses Annual Sales % of Businesses Sell for % for Sale % that Sell 3.1 M < $500K 55 <$500K 20 20 1.2 M $500K-$1M 21 <$1M 20 20 690K $1 - $2.5M 12 <$2.5M 20 25 566K $2.5-$10M 10 <$10M 20 33 90K $10-$50M 2 <$50M 10 50 22K >$50M 1 >$50M 10 100 Source: Pricewaterhousecoppers
  • 4. Business Facts • In the next decade, 35% of small and medium sized businesses are going to sell • Source: PricewaterhouseCoopers • 65% of business owners don’t know the value of their business • Source: M&A Today • 55% of business owners don’t have an exit plan • Source: M&A Today
  • 5. Exit Planning There are many ways to exit a business:  Carefully liquidate  Fire sale  Give it to your children  Sell to key employees/ESOP  Sell to a third party
  • 6. Maximize Value by Selling • Best Way to Achieve Owner’s Goals – Work with transition team • Accountant, Attorney, and Broker • Find right buyer – High net worth individuals – Strategic buyers – Financial buyers (private equity, insurance companies, etc.) – First-time buyers • Realize the full worth of the business – Price and structure
  • 7. • More buyers than sellers - lots of money • PEGs at all time high: raising/investing money • Interest rates are low • Banks lending at higher multiples • Economy is at peak performance Timing is Important The ideal time to sell is when the industry is hot! “A rising tide lifts all boats.” *PEG’s = private equity grabs
  • 8. Seller Difficulties • Valuing the business • Keeping it confidential • Marketing • Structuring the deal • Financing • Preparing documents • Negotiating • Timing • Dealing with buyers • Remaining objective • Running their business AND selling their business … when trying to sell their own business
  • 9. PLANNING SEARCH DEAL MAKING CLOSING Plan for Selling Activate Buyer Search Plan Buyer Visit First Meeting Coordinate Due Diligence Gather Data Distribute 1-Page Business Summary Tour Business Loan Request Package Recast Financial Statements Qualify Buyer Probe Buyer Interest Lender Introductions Determine Value and Assets to be Sold Determine Buyer Interest Motivate Buyer to Act – Offer to Purchase Assist in Resolving All Issues Prepare CBR /Data Package Sign Nondisclosure Agreement Facilitate Negotiations Definitive Purchase Agreement Prepare 1-Page Business Summary Present CBR /Data Package LOI or offer to purchase Review Final Documents Close! Steps to Selling A Business
  • 10. Selling Cycle 0 5 10 15 20 25 30 35 40 '1-3 '4-6 '7-9 '10-12 '12-18 '>19 %Sold Months How long will it take to sell?
  • 11. What Do Buyers Want • Cash flow • Diverse customer base • Growth potential • Support from seller (1–6 months after sale) • Reasonable price • Flexible terms
  • 12. Steps to Buying a Business Assess Your Qualifications Search For the Best Business Make a Deal Close the Deal Understand the Buying Process Identify Business Interest Meet Seller Due Diligence Determine your Financial/Credit worthiness Qualify for A specific Business Tour Business Loan Request Package Determine your Business Experience Review 1-Page Business Summary Probe Buyer’s continued Interest Find Lender Identify Licensing Determine Interest Determine whether to Act – Offer to Purchase Resolve All Issues Examine Life style changes Nondisclosure Agreement Enter Negotiations Formal Contract Identify Geographic Location Review CBR /Data Package Create and sign LOI or offer to purchase Review Final Documents Close!
  • 13. Role of a Broker • Provides confidentiality • Educates all parties on process • Creates customized marketing package • Executes strategic marketing plan • Acts as a buffer for emotions • Provides negotiation skills • Facilitates process from start to finish
  • 14. Thanks for watching! Presented by: STAPLETON ASSETS Austin, Texas (512) 200-4501 www.stapletonassets.com