Selling a business: taking our business to market

So we are now ready to take our business to market!  We know what we want from our business and in our life and are making those a reality. With the help of experienced professionals–our team of small business experts–we have:

  •  addressed the actions that add value;
  • determined the most probable selling price;
  • done the structuring and tax planning to minimize taxes when we sell;
  • addressed risk mitigation, insurance and future financial and investment issues;
  • joined the Inner Circle and are building a better business and a richer life.

It is time to put together our marketing package and plan. We need to ensure that we maintain confidentiality and that all our materials are accurate. So while Sunbelt’s professionals have expertise in marketing, it is our responsibility as business owners to review their work in detail. 

Strategic marketing and buyer screening

Sunbelt will produce three documents for us: A Blind Profile, a confidential Business Overview and a Confidential Business Profile.

A Blind Profile (BP) will provide sufficient information for a prospective purchaser to determine if they are interested, but not enough for them to identify which business it is. We must read this document carefully to ensure it doesn’t reveal anything that will allow a competitor to recognize the business as ours.

The Confidential Business Overview (CBO) will give prospective purchasers a sufficiently specific understanding of the business so they can direct appropriate questions about it when we meet with them. This document will provide detailed information about our history, market, services and products, structure, staff, clients, suppliers, physical plant and equipment, tools, systems, processes–just about everything a prospective purchaser would want to know about our business, including its strengths, weaknesses, threats and opportunities. However, it will contain only summary information about our financials.

The CBO will be released after a prospective purchaser has verified that they have interest, ability and financial resources to purchase and successfully operate our business and after they have signed a confidentiality agreement, having been interviewed and educated by a Sunbelt business broker so they understand the process and the steps involved in a successful acquisition.

The Confidential Business Profile (CBP) will contain everything that‘s in the CBO plus a detailed financial analysis of our history and future projections. It will include our financials as reported, as well as our normalized or recast financials illustrating the ability of our business to a) provide an income for the purchaser, b) do the debt servicing to pay for the business and c) provide a reasonable return on their invested capital.

The CBP will be provided to the prospective purchaser only after they have met with us and only if after that meeting they have a real desire to acquire the business and we have decided they would be a suitable purchaser.

Properly positioning your business in the minds of prospective buyers is critical. Sunbelt’s experts know that providing a buyer with detailed financials before he or she has fallen in love with the idea of owning our business will put them into an analytical state of mind that is predisposed to disqualify our business as a suitable acquisition.

But once a prospective buyer has fallen in love with the vision of owning our business, they will be scrutinizing the detailed recast financials and projections to rationalize their decision to purchase to their peers, friends and family.

Sunbelt will use radio, newspapers, social media, email, web sites, seminars and other marketing channels to attract buyers for our businesses; prospects are then put through a detailed intake process to determine what businesses would work best for them given their interests, skills, life style goals, financial resources, passions, values, experience, energy and so on. Consequently, we don’t waste time with “tire-kickers” or scammers and the buyers they bring to meet us are serious candidates. Our focus needs to be on running our businesses to keep them in top shape during the time Sunbelt is selling them confidentially for us. We have already cleaned up our documentation and financials and we are ready for scrutiny.

In the next issue, we will look at the buyer /seller meeting and what we should and should not be prepared to discuss at that time.

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