You have been working hard to turn your business into what it is today but are looking to sell it now. You want to get the best price, the best buyer, and select the best broker to guide you through the sales process. Here at NJ Broker Plus, we have a tried-and-true process that we follow when a client comes to us wanting to sell a business. Read on to discover a little more about our process, and please reach out if you have any questions.
1. Prepare your Financials: You are going to want to make sure that all of your financials are up-to-date and that you have good records. . No one will buy buy a business if the finances are unorganized and there is no proof of profit. According to the business financing company fundera.com “You’ll need to provide, on average, three years’ worth of profit and loss statements, and tax returns as part of your sale documents. Also, be prepared to account for all company income. Poor records send a red flag to prospective buyers and you run the risk of the transaction falling apart during buyer due diligence. .Hire an Expert: We highly recommend that you hire a broker (and this is not just because it is what we do!). You can focus on running your business while we confidentially search for a buyer. We explain in the first steps of our process what we expect to accomplish in each of our meetings::
- Initial meeting: We like to find out why you are selling the business, learn about the business history and gather high-level financials. We’ll also discuss the documents that will be needed such as P&L, tax returns, copy of lease, and an equipment list so we can develop a fact sheet (offering memorandum).
- Second Meeting: We complete our seller interview and co-sign the marketing & commission agreement,. Our job is to help you get the best value for your business!
2. Develop a Fact Sheet / Offering Memorandum for Your Business: This includes a most recent year P&L and any pertinent information about your business. This is shared only with prospective buyers who have signed a non-disclosure agreement (NDA). With a detailed summary of your business’ financials and key components, the buyer will be able to make a decision whether it’s a right fit for them. Some essential components of a fact sheet are:
- The business description
- The target market
- Business highlights
- Employee information
- Financial summary
- Equipment List
- Lease information
- Growth opportunities
- Training / transition details.
3. Anonymously Promote the Sale of Your Business: Here at NJ Broker Plus we put your business on the market and promote it completely anonymously. We understand your desire to keep the sale confidential and not to alert your staff. . We break this down in our How to Sell a Business Process into three parts:
- Advertise on Business Broker Sites
- Speak to Brokers in our Network
- Email Marketing
4. Find a Qualified Buyer: After all of the hard work you have put into your business you do not want to sell it to just anybody. We work to find you a financially qualified buyer. Someone who has goals and aspirations similar to yours that will carry out the future of your business successfully. Not all “interested” buyers will have serious intentions, so it’s our job to vet the “tire kickers” and only introduce you to serious, financially qualified buyer candidates.
5. Buyer Makes An Offer / Due Diligence: Once a buyer makes an offer and a sale price has been agreed upon, you’ll enter in the due diligence period. The purpose of due diligence is for buyer & seller to take a deeper dive into the business financials and provide proof that all the information supplied on the fact sheet is accurate.
6. Closing and Transfer of Business ownership: We recommend both buyer and seller hire an attorney. A purchase agreement will be created based on the offer and financial structure agreed upon in the offer letter. . Now it’s time for the closing and it’s important to have an attorney guiding you. Once this process is complete and all the documents are signed it is time to turn the business over to the new owner and provide any training agreed upon.
Selling a business is a long and strenuous task…but it can be done with less stress and more confidence when you have the guidance of an expert business broker. At NJ Broker Plus we have many satisfied business sellers who we helped through the process. Let us know if we can help you too.