Seller's Tutorial

Step’s to take after a decision to sell is made.

When positioning a business for sale many things need to be done in order to ensure that it will be sold within a reasonable time and for the best price and terms possible.

  1. Create a team and define what roles each will specifically play. This should include the seller, business broker/intermediary, accountant and attorney.
     
  2. Organize and gather financial statements that are complete and accurate. This should include income statements, balance sheets, cash flow statements and tax returns. The statements should cover the current plus the prior three to five years.
     
  3. Financially position the business:
    1. Present business fairly.
    2. Project future cash flow and profitability.
    3. Restructure profit and loss and balance sheet.
       
  4. List and detail or have the following availiable:
    1. Pending litigation
    2. Employment contracts
    3. Union contracts
    4. Employee pensions plans and profit sharing
    5. Exisitng contracts and their assignability
    6. Patents,trademarks and licenses
    7. Corporate records, corporate minute book
       
  5. Defining the sale:
    1. Asset or stock
    2. Price and terms
    3. Sale or lease of real estate available.
    4. Employment of the principals and availability.
    5. Noncompete agreement the seller’s will agree to sign.
    6. Closing dates or time restrictions seller has for selling.
    7. Finally prepare the offering prospectus and marketing package.
       
  6. Marketing package and plan should include:
    1. Product or service analysis.
    2. Customer analysis.
    3. Sales analysis.
    4. Advertising analysis.
    5. Management analysis.
    6. Employee analysis.
    7. Research and development analysis.
    8. Market and competition analysis.
    9. Facility analysis.
    10. Lease analysis.
    11. Material and equipment analysis.
    12. Inventory and purchasing analysis

Business brokers/intermediaries are the primary vehicle for selling businesses. A greater percentage of businesses are sold through broker/intermediaries than by any other means.

Contact Whitmore, Prokes & Micallef & Associates to discuss and answer your questions on your pending decision to sell or purchase. We only get paid after we complete the sale or purchase.

Nearly 90% of American businesses are family owned or controlled, according to the Institute of Family Owned Businesses at the University of Southern Maine. (Among them are big name companies like Cargill, Anheuser-Busch, Levi Strauss, Gap and Hallmark Cards) Yet only 30 percent of the family owned business in the country survive into the second generation, and fewer than 3 percent into the third, the institute said.

 
Have questions?

1-800-948-8610
info@wpmbrokers.com

 
© 2006 Whitmore, Prokes, Micallef & Associates