LOUISVILLE, KY June 29, 2012 - Brian Mazar, CEO of American Fortune, released today the company’s ten tips to successfully sell a business. “The current economic climate scares a lot of people on both a personal and professional level. We wanted business owners to be armed with tips to help them make an informed decision and proceed in and advantageous manner,” states Mazar.
Mazar went on to provide the following ten tips:
1. Make sure there is a valid reason for selling the business. Don't decide to sell because of a bad week or decide to "test the waters" just to see what sort of price the business will command. Before you decide to sell your company, focus on your true objectives. The first thing a prospective buyer will want to know is the reason you are selling. The more valid the reason you offer, the more serious the buyer will be.
2. Don't wait until you have to sell. You don't want anxiety to force you into accepting a deal that's not good for you--or for the buyer.
3. Once you have made the decision to sell--and before talking to your Business Intermediary -- gather the information needed to market and subsequently sell your business.
4. Remember that you are part of the marketing team. Your Business Intermediary can't do it all--and might even ask you to come to an office meeting to tell the rest of the staff about your business. Follow your Business Intermediary’s advice about dealing with prospective buyers--there's a right and a wrong time to meet them.
5. Confidentiality works both ways. The Business Intermediary will constantly stress confidentiality to the customers to whom he or she shows your business. However, as the seller, you must maintain confidentiality about a pending sale in your day-to-day business activities.
6. You, as the seller, should put yourself in a prospective buyer's position. The next time you go to your place of business, pretend you are a buyer looking at it for the first time.
7. Just because you are selling, now is not the time to let the business slip. It's important that prospective buyers see your business at its best: bustling, and showing no signs of neglect. Here are a few areas to focus on:
8. Engage an outside professional who understands the sales process. David Gumpert, former Harvard Business Review associate editor said, "Inexperienced lawyers are often reluctant to advise their clients to take any risks, whereas lawyers who have been through such negotiations a few times know that's reasonable." If you are going to use a lawyer, use one who is seasoned in the business sale process.
9. Be flexible! You need to keep the ball rolling once an offer has been presented. Study it closely. Just because you didn't get your asking price, the offer may have other points that will offset it, such as higher payments or interest, a consulting agreement, more cash than you anticipated or a buyer that you are comfortable with. You have probably spent years building your business--you want it to continue to be successful. The right buyer may be better than a higher price, especially if there is seller financing involved, and there usually is. If you must counter-offer, do so only on those points that are really important to you. Be willing to negotiate for a win-win in order to complete the deal. There is an old adage that the first offer you get is probably the best you will ever get--and it's true.
10. Remember that most successful transactions are successful because they create a win-win situation for everyone involved.
1. Place a reasonable price on your business. Since an inflated figure either turns off or slows down potential buyers, rely on your Business Intermediary to help you arrive at the best "win-win" price.
2. Carry on "business as usual." Don't become so obsessed with the transaction that your attention wavers from day-to-day demands, affecting sales, costs, and profits. Since the selling process could take as long as a year, the buyer needs to keep seeing a healthy business.
3. Engage experts to insure confidentiality. A breach of confidentiality surrounding the sale of a business can change the course of the transaction. Expert intermediaries can channel the process and the parties involved to keep the sale within safely silent bounds.
4. Prepare for the sale well in advance. Be sure your records are complete for at least several years back and do all pertinent legal or accounting "housecleaning"--as well as a literal sprucing-up of the plant or store.
5. Anticipating information the buyer may request. In order to obtain financing, the buyer will need appraisals on all assets as well as information to satisfy environmental regulations (when real estate is concerned).
6. Achieve leverage through buyer competition. This can be tricky; you are wise to let your business broker, as a third party, create a competitive situation with buyers to position you better in the deal.
7. Be flexible. Don't be the kind of seller who wants all-cash at the closing, or who won't accept any contingent payments or an asset transaction. Depend on the advice of your intermediaries--their knowledge of financing and tax implications-- to keep the deal sweet instead of sour.
8. Negotiate; don't "dominate." You're used to being your own boss, but be prepared to learn that the buyer may be used to having his way, too. With your Business Intermediary help, decide ahead of time when "to hold" and when "to fold."
9. Keep time from dragging down the deal. To keep the momentum up, work with your intermediary to be sure that potential buyers stay on a time schedule and that offers move in a timely fashion.
10. Be willing to stay involved. Even if you are feeling burnt-out, realize that the buyer may want you to stay within arm's reach for a while. Consult with intermediaries to determine how you can best effect a smooth transition.
American Fortune Mergers & Acquisitions, LLC is a nation-wide firm that provides services in the areas of growth-to-exit planning, mergers and acquisitions and business valuations for businesses with revenues between $3 million and $100 million. American Fortune was founded by industry veteran Brian S. Mazar who developed a unique buying process that is sell-side driven. Due to this process, American Fortune successfully sells their businesses at an average of 98% their listed price.
Mr. Brian Mazar
American Fortune Mergers & Acquisitions
505 Third Street, Suite 301,
Louisville, KY, 40202