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Seller Articles

Common Mistakes Sellers Make

The following are common mistakes sellers make: • They neglect to run their business during the sales process. – The owner of a business with sales under the $20 million range can get so involved in the selling process that they neglect the day-to-day operation of the business. • They don’t understand the “real” value of their business. –…

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Points to Ponder for Sellers

So you’ve finally decided it’s time to sell your business. It’s natural to have many questions pertaining to the process of selling – but are you asking the right questions? Here are a few points to ponder for sellers: Who best understands my business? When interviewing intermediaries to represent the sale of your firm, it…

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Is Your Company Hiding an Orphan?

Does your business have an orphan product or service that is doing okay, but doesn’t seem to fit into your core business?  Many companies, private equity groups and even some individual buyers are seeking product lines to augment existing ones, or even to build a business around.  Here are just a few of the reasons…

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What is the Value of Your Business? It All Depends.

The initial response to the question in the title really should be: “Why do you want to know the value of your business?” This response is not intended to be flippant, but is a question that really needs to be answered. Does an owner need to know for estate purposes? Does the bank want to…

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When Is A Company In Trouble?

A company can be in trouble or headed for it for many reasons.  However, most of them can be linked to one or more of the following: • Lack of proper focus • Poor management • Poor financial controls • Loss of key employee(s) • Loss of important customer(s)/client(s) • Not keeping up with technology • Quality control or other operating issues…

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Confidentiality Agreement

“Confidentiality Agreement – A pact that forbids buyers, sellers, and their agents in a given business deal from disclosing information about the transaction to others.” The M&A Dictionary It is common practice for the seller, or his or her intermediary, to require a prospective buyer to sign a confidentiality agreement, sometimes referred to as a…

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Creating Value in Privately Held Companies

  “As shocking as it may sound, I believe that most owners of middle market private companies do not really know the value of their company and what it takes to create greater value in their company … Oh sure, the owner tracks sales and earnings on a regular basis, but there is much more…

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Seller Financing — How a Broker Can Help

Another important factor relating to the asking price is the amount of cash involved in the sale. There is an old saying that the higher the full-price, the lower the down payment – and vice-versa. The sale of almost any business involves some seller financing. The smaller the down payment, the higher likelihood of a…

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Keys to a Successful Closing

The closing is the formal transfer of a business. It usually also represents the successful culmination of many months of hard work, extensive negotiations, lots of give and take, and ultimately a satisfactory meeting of the minds.  The document governing the closing is the Purchase and Sale Agreement.  It generally covers the following: • A description…

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The Offering Memorandum

A solid, factual and compelling offering memorandum maximizes the chances of not only selling a business, but obtaining the highest possible price.  An offering memorandum is also referred to as the selling memorandum, a confidential descriptive memorandum, or simply as “the book.” The memorandum, regardless of the terminology used, must be as factual as possible,…

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