What Does Selling A Business Involve? Part 2

Some people only ever be involved in a business sale once, typically when they are looking to retire. Others will find themselves having businesses for sale a number of times during their careers as they move from one project to the next and this pair of articles looks at what is involved in realising the value of a business.So What Is So Difficult About Selling A Business?It’s important to realise however that there are fundamental ways in which selling your business will differ from the process of selling your car outlined in Part 1.When you sell your car, you don’t expect:- To worry about giving out information to prospective buyers about the car.- To worry about advertising that the car is for sale.- To be asked to lend the purchaser the money to buy the car.- The final price to be uncertain until you have worked out exactly how much petrol is in the tank.- To be expected to have to give written confirmation that the car has not broken down in the last two years.- To be required to give your purchaser driving lessons.- To promise the new owner that you won’t buy a new car.- The final price to be dependent on how well the car keeps running over the next two years.- To consider the tax implications of a sale.- To need anyone else’s permission to sell (assuming that you have paid off any hire purchase).But when you sell your business you may well find:- You need to be careful about how much information you give out during the process as for example, you don’t want your main competitors picking up your key customer list for free.- You want to keep the fact the business is for sale secret from suppliers, staff or customers until the deal is done.- You have to allow the purchaser some credit to enable them to pay you in part over time out of the profits of what was your business (known as ‘vendor financing’ or deferred consideration).- The final price will have to include stock at valuation (‘SAV’) at the date of sale.- You are asked to confirm some facts about your business in writing (‘give warranties’).- You have to agree to stay on for anything from a few weeks to a few years to help train the purchaser in running your business or to smooth the introduction of the buyer to your customers.- You are asked to sign an undertaking not to set up business again in any way that will compete with the business you have just sold.- The price agreed includes clauses that adjust the total paid up (‘escalators’) or down (‘clawbacks’) based on future performance.- Tax planning may be vital to ensure you obtain the best net result from your sale.- You may need agreement for the sale and transfer of assets or contracts from your landlord, franchiser, or even suppliers or customers with long term contracts that include clauses covering change of business ownership.In addition, just as there are specific price guides, key criteria for valuing (make, model, age, condition and mileage), and specialist magazines for selling cars, there may be similar ‘standard approaches’ that are specific to your business such as:- traditional routes to sale – such as specialist agents who deal with licensed premises, agricultural land agents or brokers who specialise in professional practices,- standard information required on which purchasers make decisions or on which businesses in your industry are valued – such as barrelage for pubs, or- traditional sale terms – such as SAV (‘stock at value’) for pubs.So How Will These Issues Affect Your Business Sale?The degree of complexity involved in the sale process and the issues arising from it will vary dependent on the size and complexity of the business and the nature of the sale.- A small husband and wife or lifestyle business such as a pub, small shop or guest house might typically be selling to other individuals. To reach these they might advertise for themselves in the small ads section of the relevant business press, or engage specialist estate agents. They would normally expect to achieve a relatively quick hand over although a deal might involve some form of vendor financing (where part of the payment is deferred over time), and a short period of ‘on the job’ training in running the business.- A small service business or professional practice such as a vets, dentists, accountants, estate agents or solicitors will often use specialists firm of business brokers to sell to other firms looking to expand although junior partners within the firm may have the option to buy out older partners who are looking to retire. This type of deal will often require a period of consultancy of up to say two years to allow for an orderly hand over of the trade and client base to the new owners and the price may involve some form of ‘earn-out’ where the value agreed will include an element to be determined by future performance.- An established industrial business with a turnover of over a few million is likely to need to engage accountants to assist in preparing the business for sale, marketing the business and dealing with the purchaser’s advisors. The buyer may be another business (such as a competitor in the industry) by way of a ‘trade sale’ or a team from within the business’s existing management (a management buy-out or ‘MBO’) backed by venture capital (VC) firm. The purchaser will employ accountants to undertake a detailed review of the business’s financial position and trading performance and prospects (a ‘due diligence report’) and payment might in part be made by way of shares or options in the acquiring company (‘paper’) rather than cash.- A rapidly expanding high tech business with high growth plans will need to engage a team of specialist corporate finance advisors to market a stake in the business to potential funders to raise money for the business’s expansion. Depending on the scale of funding needed, potential investors targeted could be wealthy individuals looking to invest in (and often to become actively involved as a director of) growing companies (‘business angels’); venture capital (‘VC’) houses looking for investment in the sector; or obtaining a listing that involves a number of external investors buying the company’s shares such as an Ofex or AIM listing. This process will require the preparation of a detailed sales document (‘prospectus’) requiring a range of projections and professionally prepared information that needs to comply with complex regulation and the transaction can involve a complex range of capital instruments such as preference shares and/or options put in place as part of the new financing arrangements.So while business sales all involve the same activities, the type and complexity of the issues involved will vary substantially dependent on the nature and scale of the business involved.

9 Steps to Sell Your Business Fast

Selling your business fast and at a fair market price is the goal of many small business owners. After making the decision, “I want to sell my business,” there is nothing more frustrating than having the market respond or getting very low offers. Understanding the selling process will greatly help you to sell your business faster.To sell your business fast, follow these 9 steps.Step 1. Establish Fair Market PriceThis is the most important part of selling your business. Because the value of the business is more than just the equipment and furniture and fixtures, determining the fair market price requires detailed knowledge of the market place and what buyers are paying as well as an in depth understanding of your business.To obtain the fair market price, you will need to contact a business broker or business valuation specialist who values businesses on a regular bases.To estimate the fair market value, minimally your valuation professional will want the following documents:Last 3 years of tax returns
Current Profit and Loss Statement
Current Balance sheet
Copy of LeaseBecause small things, like outstanding Daily Deal coupons, can make a buyer walk away, so it is important to be open and honest about your business in order to establish the Fair Market Value.Step 2. Prepare a Confidential MemorandumThe Confidential Memorandum is a brief summary of your business that answers the key questions that buyers ask. This is only shared with a buyer after they been pre-qualified and have signed a confidentiality agreement. This document drastically reduces the time wasted with unqualified and not serious buyers. Many business brokers will only prepare this document for larger businesses because it is very time consuming and detailed. As the owner of smaller business, your business will sell faster with this document. This is the foundation of your marketing program and basis by which the buyer will evaluate your business. It really is a must to sell fast.Step 3. Market your business – confidentiallyOnce the profile of the ideal buyer is determined, it’s time to create a strategic marketing plan to attract that buyer. That could through the internet, paper advertising or direct marketing. With over 90% of the buyers coming from the internet, It is important to leverage the internet as a tool to sell your business fast.Some brokers will market to 30 sites while others market on over 300 sites. When choosing a business broker, consider their familiarity with online marketing techniques to help you sell fast. If you had to advertise yourself on these sites, without using a broker, you might pay up wards of over $1000 per month and no guarantee your business would sell. This is one area where using a business broker that understands marketing can help you find the ideal buyer faster and cheaper.Step 4. Screen and meet with qualified buyersThis can be the longest and most intensive part of selling a business. One business can get 20-30-50 calls and each buyer must be taken through a detailed screening process to determine if they meet the criteria of the ideal buyer. This includes a phone interview, financial background check, often a criminal record check, as well as a confidentially agreement. Finding buyers is easy, finding the perfect buyer takes times and profiling skills.Sadly, when a business owner tries to sell their business them self they fail to properly screen prospective buyers and this can lead to devastating results, both financially and legally.Step 5. Presenting the businessOnce a prospective buyer has been qualified and if required, the seller has approved the person to see the confidential memorandum, then it is time to present the information about the business.After the presentation, the next step is to qualify the buyer to see if they are serious about buying the business before they ever see or meet you, the seller. This saves you time by only meeting with pre-approved, pre-qualified buyers that know about the business details.Step 6. Conduct a buyer seller meetingOnce a prospective buyer has been found that meets the criteria, can be financed, has sufficient down payment, and is serious about pursuing your business, it is time for you to meet them.This gives the you, the seller a chance to meet the buyer and discover their style, attitude, and personality. This gives the buyer a chance to ask more questions. After this meeting, if the buyer is serious either a letter of intent (LOI) or purchase agreement is completed.Step 7. NegotiationsWhen selling a business, everything can be negotiated. Deals can be as creative as they need to be in order to meet the needs of both the buyer and the seller. Here are few of the terms that can be negotiated: price, seller financing (down payment and interest), time the seller stays with the business. Who pays commission, and much more. A well trained business broker can assist in structuring the deal so that everyone wins and this is one of the greatest advantages of using a business broker.Step 8. Due DiligenceAfter the offer has been accepted, the due diligence period begins. Due diligence is the process of verifying all the important information in the business as pertains to the sale.The due diligence process should answer the questions:Should I buy it?How much should I pay for it?How am I going to pay for it?The buyer is responsible for the due diligence process and can take anywhere from a few weeks to a few months or more. If you are offering seller financing this is also the time that the seller is able to perform their due diligence on the buyer. This often includes: inspecting their background, financial position, credit history and more with proper authorization.Step 9. Getting the deal closedFor professionals that exclusively sell businesses, closing deals is routine. Your business broker should attend the closing with you to assure all the paperwork is correct, all the documents are in place and to answer any last minute questions or concerns. This is not a time to short cut the process. Many deals have fallen apart at the closing table and without a representative to bring it back together, your business might be left unsold.Selling a business fast and at a fair market price is not easy and there are many pitfalls along the way. Because this just might the majority of your retirement, the most expensive thing you can do it try to do it yourself. Using a professional to guide you will not only help you to sell your business fast, but to ensure you get the best deal you can.

MonaVie Business – 5 Steps to Enrolling 3 Reps a Day

The MonaVie Business explosion is a profitable trend that’s surviving despite the dire economic conditions. Budgets are tightening, but the MonaVie Business Opportunity prevails on the universal desire to maintain a healthy lifestyle. Use this 5 Step Process and you’ll be well on your way to enrolling 3 Reps a day.Step 1: Know your Product
Start with Research. You’ll need to answer the basic questions: Who, What, When, Where, and Why. Who needs to use MonaVie products? Why do they need these products? Once you answer all of these questions, learn about the benefits of your products. Research the acai berry, free radicals, antioxidants, and the ailments your products are known to benefit- such as diabetes. If you know your product inside and out you’re prepared to answer any potential client/rep rebuttals.Step 2: Know your Audience, Find your Niche
Now that you know your product, you need to know your targets. Knowing the benefits of the MonaVie Business products is an advantage for this step. MonaVie reviews show their products can aid a plethora of health issues from obesity to attention deficit disorder. This means you can target people concerned with weight loss or even people with short attention spans, the possibilities for demographics are endless!Step 3: Develop the Approach, Basic Sales
Next you’ll need to develop an approach for selling to your target audience. It’s basic sales from here, you need to know your audience’s problem, and you’ll need to have a solution for the problem. Let’s say you chose the weight loss niche. Your audience’s problem is being overweight, and the solution is the MonaVie Business products. Develop a pitch around the problem and solution, and write a sales script for your reps to use.Step 4: Sell the MonaVie Business Opportunity, Find Your Believers
Selling the product to your reps is just as important as selling it to your clients. You need your reps to believe in the MonaVie Business Opportunity. Get passionate and reveal you research findings. Explain how the sales script is specifically targeted to your chosen demographic. Let them know you’ve done all the hard work for them, all they need to do is what they do best- sell the product!Step 5: Defeat for Rebuttals, the “MonVie Scam” and “MonaVie MLM” Issues
The MonaVie MLM sales structure receives a lot of criticism. Due to some MonaVie Reviews and complaints, many people believe in a “MonVie Scam”. However, if you’ve thoroughly completed every step in this process you already have quantifiable evidence to prove that the MonaVie Business is worth investing in, and that your reps will be successful.