The process of selling a business on your own can and usually is an all-encompassing endeavor that requires specialized skills, substantial time commitments and many frustrations that does not usually end with the sale of a business. In fact, 78% of businesses placed on the market for sale that are valued under $500,000 do NOT sell… There are many reasons for this, but that is why Golden Circle Advisors has developed the Seller’s Advisory Services™ Program to help increase the odds of business owners realizing their ultimate goal of selling their business’.
To simplify the selling process, it can be broken down to these 5 major steps:
Negotiations / Acceptance / Decline
Step 1: Preparation
One of the most time-consuming steps in this process is gathering the required information necessary to complete both a business valuation to determine the recommended price to market your business and a Confidential Business Review (CBR) that will be used to market your business to interested acquirers. Once we get this information, you will execute our SAS™ Listing Agreement.
The information needed to complete these tasks, include:
5 years of Federal income tax returns
5 years & YTD of financial statements, including Profit & Loss Statements and Balance Sheets
Identify expenses that need to be adjusted reflect the true operating costs of your business. Most business owners pay for some expenses that a new owner will not require.
Real estate and/or Lease information with Appraised Value
Franchise information, if applicable
List of all furniture, fixture, equipment, vehicles and inventory with Fair Market Values
Basic business history
Completion of a detailed questionnaire about the business
In addition, GCA will usually want to conduct a new client intake interview after reviewing the requested information. This will allow us to better understand the business today and discuss the growth opportunities available to a new owner.
Once all this information is provided to GCA, it will usually take 4 to 6 weeks to prepare the business valuation and CBR.
Step 2: Marketing
Once the CBR has been approved, GCA will utilize various online business selling websites to market your business. The cost of these services for an individual business owner to use would far exceed the monthly subscription cost of GCA’s SAS™ Program.
In addition, GCA has built a proprietary database of individuals, businesses and private equity firms that have expressed interest in purchasing businesses.
Step 3: Inquiries
As potential buyers inquire about your business, GCA will require them to execute a Non-Disclosure Agreement to protect the confidentiality of your business being for sale, plus require completion of a Financial Disclosure Statement that will allow us to qualify the potential buyer in their ability to actually purchase your business.
Once GCA in receipt of this information, we will make a formal introduction between you and the potential buyer. GCA will be available for consultation to assist in this discovery process.
Step 4: Negotiation / Acceptance / Decline
If the potential buyer is ready to make an offer on the business, GCA would be available to assist in the preparation of a Non-Binding Letter of Intent (LOI). Once both parties have come to an agreement to the price and terms of the business, GCA will be available for consultation during the due diligence process and final preparation of closing documents between both the buyer’s and seller’s professional advisors, including attorneys and CPA’s.
Step 5: Closing
There is a lot that needs to get done before you reach this point, but with careful planning, organization, a sense of urgency and professionalism…you can get to the day when your business can be transferred to a new owner and you can turn your many years of hard work into funding your retirement or next venture.
If you are ready to get started in this process, check below.