Here are some questions for sellers to ask themselves when selling their business:
Who best understands my business?
It is important to discuss your decision process when interviewing intermediaries to represent the sale of your firm. An intermediary can’t respond to a prospective seller’s concerns without this discussion.
Are there potential buyers?
It always helps to reveal any possible buyer, an individual or a company, that has shown an interest in the business for sale. All possible buyers should be contacted now that your company is available for acquisition; regardless of how far in the past the interest was expressed. These people are top prospects.
Is there communication?
Communication between the seller and the intermediary involved in the sale should be handled promptly. Calls should be taken by both sides, and if either side is busy or out of the office, the call should be returned as quickly as possible.
Does the offering memorandum have cooperation from both sides?
The offering memorandum must be as complete as possible. Some of the important sections require careful input from the seller. Some examples are: the company’s competitive advantages and/or shortcomings, an analysis of the competition, how can the company grow, are there pending lawsuits.
How organized are the financials?
Sellers can easily provide last year’s financials, but that’s just a beginning. It is necessary to have five years, plus current interim statements and at least one year’s projections. In addition, the current statement should be audited.
Are the attorneys “team players”?
Occasionally an attorney for one side or the other becomes a deal-breaker instead of a dealmaker. A sign of this is when an attorney attempts to take over the transaction at an early stage. Sellers and buyers need to inform their attorney that they want the deal to work, or change to a counsel who is a “team player”.
Intermediaries are responsible for handling what is usually the biggest asset the owner has – and they are proud of what they do. Intermediaries realize that the sale of a business can create the financial security so important to a business owner. Even when a company is in trouble, the intermediary is committed to selling it, since by doing so, jobs will be saved – and the business salvaged.