An entrepreneur makes “once in a lifetime” business decisions more often than once in a lifetime. The earliest of such decisions tends to involve starting a business—or perhaps buying one. Usually there is the eventual—and equally momentous—task of selling the business. Most people recognize that when starting a business, it is essential to work with a plan. When it comes to making things happen, however, many proceed without due care and wind up finding themselves unprepared.

Selling a business offers owners a unique opportunity to reap the financial rewards of the long years of their lives to which they have committed their best ideas and greatest efforts—in building operations, hiring and training employees, building and marketing to a customer base, establishing best practice procedures…and so much more.

Remember that selling a business is like giving up the tree, which is a process quite separate from the day-to-day selling of the tree’s fruits. It means that you have only one chance to do it right. The outcome of such a transaction can be rewarding or disastrous on both financial and emotional fronts, depending largely on approach.

In order to maximize the financial rewards and make the necessary transitions as smooth as possible, it is imperative to sell a business with a thoughtful plan.

Understanding the process of selling a business is integral to establishing the right plan. As someone smart once said, if you fail to plan, you plan to fail.

We at The Behar Group have identified several questions that need to be addressed in order to customize a selling strategy that is adequate to you and your business:

Valuation: One of the most common reasons to sell is to “cash out,” so it makes sense to ask, “How much can I expect to get from the sale?” There are a range of commonly-accepted methods for establishing a business’ value. Since there is no magical one-size-fits-all approach, we apply the “best use” methodology to match the proper valuation model to your type of business.

Decision to sell: Why are you selling? Is this the right time? What are you going to do after the sale? Questions like these must be addressed before you make a decision to sell and forge ahead with a “Big Picture Plan.”

The “Big Picture Plan” (BPP): This plan is prepared and presented to clients to facilitate proper preparation of a more detailed action plan. It takes into consideration the following:

• How much? Establish a strategic asking price, and define what is for sale. (Is real estate included in the sale, or sold separately?) Owner financing—yes or no? Is there additional compensation for training or working in the business? If so, for how long?
• To whom?Who are the potential buyers, and what is the best marketing plan for the business? (Here you will have to consider the benefits of promotion versus your need for confidentiality.)
• Who is doing what?The plan will specify the general roles and responsibilities of a team: realtors, lawyers, accountants, finance brokers, and additional experts as necessary.
• When? Initial timetable for the more detailed planning and activities to be performed prior to taking your business to market.

After the client has approved the BPP, we will create a more detailed plan and commence the practical legwork of selling your business. These steps include but are not limited to the following:

• Gathering all information required for preparation of a marketing campaign (executive summary, investors’ and buyers’ presentations, advertisement design, etc.);
• Identifying potential buyers; finding the best way to approach and interest them; and promoting the sale of the business to the identified market using appropriate tools (online and print media, MLS, talks with The Behar Group registered clients and potential investors, etc.);
• Communicating with and screening potential buyers who have expressed interest;
• Obtaining NDAs (Non-Disclosure Agreements) from qualified buyers before sending out the executive summary and/or business feature sheet;
• Following up and answering any additional questions from qualified buyers;
• Meeting with qualified buyers and their representatives to determine their interest in submitting a letter of intent (a preliminary conditional “offer”);
• Coordinating visits to the business and/or meetings with the owner before submitting an offer;
• Negotiating terms and conditions;
• Making sure that a contract is in place (by coordinating with lawyers);
• Coordinating the due diligence process;
• Coordinating the closing.

The process is much more complex than it appears in outline form, although the aim of the process is ultimately to complete a successful and relatively stress-free transaction for every seller.

If you have a business to sell or are interested in buying a business, please feel free to contact me

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