Forward thinking business owners realize that they need a period of time

to develop and implement an exit strategy. It is better to plan, rather than get

caught in a life changing event that demands that the business be sold quickly.

Most owners have never needed to sell a business. If possible, start preparing to sell

a business at least a year before putting it on the market. There are many issues to

consider, such as 1) business value, 2) sell it yourself, 3) transfer ownership to

employees, family member, etc., 4) use a business broker (local broker or one with

international reach), 5) tax consequences of the sale, and many more

We assist owners to prepare a business for sale in these four areas:

• Financial
• Employee
• Contractual
• Structural

Financial Issues:
A firm’s financial statements are prepared to manage tax consequences, often

resulting in reduced perception of business value . This does not work in your favor

when you sell a business. It is essential to recast your financial statements for the

last three years before you sell a business. The value components of the business

(cash flow, assets, and inventory) must be quantified so that a defense for the

highest business value can be prepared. Buyers who approach you will not maximize

business value for you – their goals are the opposite of yours.
We help owners prepare to sell a business by recasting their financial statements and

tax returns and by advising on how the perception of business value can be

maximized.

Employee Issues:
A major concern of buyers is that key employees may leave after the deal is closed.

You will want a stable workforce when you implement an exit strategy. You will want

to make sure that you are not perceived as “being the business.” As part of an exit

strategy, some owners speak with employees of their plans and others choose to sell

a business confidentially and inform employees of the sale after the fact to minimize

potential distractions during the marketing period. Each situation is different. Examine

your retirement, profit sharing and pension plans, if any. Your exit strategy may

include making changes to increase attractiveness to buyers.
We review company organizations and benefit plans and advise on changes that can

be made to enhance buyer appeal when you sell a business.

Contractual Issues:
Buyers want to make sure that business will continue after they take ownership.

Contracts that will be beneficial to a buyer should be kept and extended, if possible.

Harmful contracts can lower the perceived business value of your company. Review

your real estate and equipment leases. You do not want real estate leases to expire

when you are attempting to sell a business. Move, if you are not in a good location.

Correct equipment leases that may not be advantageous to buyers.
We review contracts and leases and suggest changes that can be made.

Structural Issues:
Systematize, document, and implement standard policies, especially as regards to

cash flow. Eliminate special family-type treatments, or at least document them so

that buyers will not be surprised. It is usually better to have real estate owned

personally or in a separate corporation, to decrease complexity of the sale. Consider

incorporating well in advance of the sale, if you are a sole proprietorship or

partnership, to better manage liabilities.
Be sure your corporate records are kept current.

You will need to consider many other issues when you sell a business. What

level of owner financing are you willing to accept? Will you sell all or part of the

business? Will the sale be an asset sale or a stock sale? Every transaction is different,

so be flexible as you plan to place your business for sale.
Our analysis of business performance optimizes exit strategies. We quantify value

components and prepare business valuations for businesses.

As professional business brokers we implement the owner's exit strategy

in a marketing campaign while he focuses on operating the business and

maintaining its profitability.
We review the processes and procedures (written and in the owner's head) of the

company, advise the owner of probable impacts as he plans to place his business for

sale, and suggest exit strategy options.