The Process of Selling a Business
What you need to know
Valuation: As a certified valuator, GAI will help you arrive at an accurate and defensible business price. The valuation measures assets, revenue, profits and cash flow, and the factors unique to your business such as growth, competition, location, customer goodwill, and the terms of sale.
List & Market: Determine your goals, sign the listing and begin marketing with a complete, professional and confidential profile of your business. Qualified leads will receive business history and descriptions of facilities, operations, organization, financial data, marketing, and other elements which enhance the sale of your business.
Discovery: GAI markets businesses through various channels. Buyers are screened and qualified. Interested buyers will provide questions and request information about your business. An initial meeting occurs between the seller and the prospect and eventually, a site visit is scheduled. The discovery process helps a buyer prepare an offer.
Letter of Intent: The L.O.I. is a non-binding agreement which outlines the key terms and conditions of the buyer’s purchase offer. Purchase price is defined, and, equally important, payment structure, transition support, non-compete agreements and contingencies to close. This is an effective negotiating step and helpful when comparing multiple offers.
Due Diligence: Common due diligence requests include asset & equipment lists, insurance policies, vendor agreements, vehicle titles, etc. GAI is here to help you organize this information. GAI will also help the buyer interpret and approve the information.
Securing Financing: Banks will have additional due diligence requests and forms to sign in order to generate a commitment letter. GAI will collect and coordinate submitting this information and will work to ensure the buyer can close the loan and complete the sale.
Contracting: GAI evaluates all offers and submits them to you. During negotiations, GAI leverages the hidden value and strengths to overcome deficiencies in your business perceived by the buyer. With your legal counsel, we negotiate the structure, terms and conditions of a transaction favorable to all parties.
Closing: GAI assists the buyer and seller through the close of the purchase, including arranging the escrow and working with the attorneys, accountants, Small Business Administration lenders, landlords, regulators, or whoever is required to ensure a smooth transition. You experience both highs and lows during the above steps in the selling process and possibly six months or more may have passed, but using the above techniques you can systematically get to the finish line and realize your dream of successfully selling your business!
Following are some of the most common topics and questions frequently brought up by sellers. If you have any questions that we have not covered, please don’t hesitate to contact us.