By Ryan Jorden

Most people are unsuccessful when it comes to selling their business on their own. They simply aren't aware of what common mistakes to avoid and how to best communicate with potential buyers. At VR, we've honed our process over many years to provide you with the best chance to sell your business for the most amount of money in the least amount of time. Here's how we do it:


1.  Getting to know each other

The process of selling your business is firmly entrenched in relationships from the moment you begin. Therefore, it's very important that we take the time to understand what your personal and business goals are, why you're interested in selling and what has contributed to the success of your business. This all leads us to a greater understanding of your business, what intrinsic factors are driving the value, what might motivate a buyer to purchase it and who that buyer may be. 

Additionally, it's important that you have a firm understanding of what makes our process successful so you can determine if we're the best choice to work with you. We will answer all of your questions and explain the process to you in detail so you know where you're at and where we go together from here. The expectations we set for each other early on will help set the table for a smooth and successful sale.


2.  Valuation

As you may be aware, the accountant prepared financials of your business only tell one side of the story and do not represent the true earnings of your business. Therefore it's important to have a professional market valuation completed that can show true cash flow and determine the most probable selling price of your business. This fair market assessment will provide us with a firm foundation to justify the value of your business to a buyer, their accountant and their lender.  

You don't want to be asking too much and thus fail to sell, nor do you want to underestimate the value of your business and leave hard-earned money on the table. At the end of the day, there isn't anything more relevant to whether or not you actually sell your business than what your asking price is. 


3.  Marketing & Finding the Buyer

After the results of the valuation have been discussed and you've made the decision to engage, we will then begin the preparation of your confidential marketing package. It is a professional presentation of information that is reserved for the eyes of a qualified, serious buyer. It will provide them with the data they require to understand your business and proceed with an offer to purchase. 

We also require that all potential buyers sign a strict Non-Disclosure Agreement, complete a Buyer Profile and speak with us at length so we can determine that they have the ability to purchase and successfully operate your business. Nobody will be introduced to your business without the necessary skills, interest, qualifications, experience and financing. 

The key in selling any business is showing it to the right person. To locate these buyers, we utilize our international database of qualified buyers, as well as generically listing it on the busiest 'business for sale' websites. Depending on your business or industry, we may also confidentially approach potential buyers directly to let them know we're representing an opportunity that may be of interest.

A larger number of qualified buyers mean a higher price for your business. Because of our dominance in the marketplace, we receive a few hundred buyer inquiries a month and currently have a considerable backlog of qualified prospects searching for businesses.


4.  Meeting the Buyer

All initial showings of your business will be conducted through our secure Virtual Data Room. This allows us to deal with potential buyers from all over the world. Only qualified buyers that we believe are a good fit and have the financial means to complete the transaction will be provided "view only" access to your confidential marketing package. This gives them an opportunity to learn about your business and generate questions in preparation for meeting you in person. 

Meeting the buyer in person will allow you to start building a relationship with them immediately and gives you both an opportunity to ask each other questions. An initial meeting will typically last 60 to 90 minutes and be hosted after hours at the business location. A business opportunity becomes more real to a potential buyer when they have the chance to meet you and view the facility location in person.


5.  Offer to Purchase / Due Diligence / Closing

Once a serious buyer has been identified and qualified, we will assist in facilitating the negotiations. We know how to structure transactions to maximize the chance of a successful transition that works for all parties. We will work with the buyer to prepare the offer and counsel you on your options of accepting, countering or rejecting the offer and on what has to be completed before closing can take place.   

Once a conditional agreement is in place, the buyer will get increased access to information about your business. This due diligence period allows for them and their counsel (accountant, lawyer, lender) to verify the information that they've been presented. We will coordinate the the flow of information in an objective and professional manner and provide both lawyers with the documentation they require. 

We will also work with the landlord to assign the lease while your lawyer is drafting up the remaining documents that form the Final Purchase Agreement. This typically includes the non-compete agreement, promissory note and employment/consulting agreement.  Once all of the conditions have been satisfied, and paperwork completed, money will be exchanged and the transition of ownership will be complete.

If you're thinking of selling your business, we would be pleased to answer your questions and assist you with this process. Let us put our expertise to work for you!

THE STAGES OF RETIREMENT
Much like other life-changing events such as marriage or divorce, retirement is now recognized as a long period of emotional adjustment in terms of our relationships with others and perception of ourselves. Although the names vary, psychologists and researchers are attempting to define stages of this transition, namely pre-retirement planning and anticipation, the initial euphoria of The Big Day, the Honeymoon phase, the disenchantment that comes after the initial high, and the reorientation to a new routine. Naming these stages can help guide those planning retirement or who have retired. 

PLAN AND PREPARE
Our working lives start a phase of accumulation: get a car, a house, maybe a spouse, some children, recreation toys, and property. Although saving from the start is important, it is only later in our careers, as we get a handle on our expenses and our incomes are rising, that we establish the bulk of our saving for retirement. As retirement nears we tend to look ahead and plan for its bigger components. Where will we live? Will we have pension income? How much savings do we need to provide for what the income cannot? Often overlooked are more personal questions related to what we will do with the sudden surplus of time, lack of work-related socialization, and loss of structure and routine. 

THE BIG EVENT
Retirement comes with a round of smiles, handshakes, farewell parties, and celebrations. Some are muted and sporadic; others are gala events comparable to weddings. This cessation of employment is the shortest stage in this process. 

THE HONEYMOON
Once the retirement celebrations are over we enter a period when the newly-retired start doing all of those things they were looking forward to doing once they stopped working. This time of travel, hobbies, visits to relatives, and lazy mornings is also referred to as the drunken sailor stage of retirement, a relaxation bender, if you will. 

...NOW WHAT?
After the initial emotional high of the honeymoon many retirees must deal with a feeling of letdown. Getting back to the business of living can lead to a creeping up of feelings of boredom, uselessness, and disenchantment. The objective of a successful retirement is to retire to something instead of from something. Retirees must build a new sense of self and find new purpose. We remain healthier and happier when we have purpose, whether that translates to a second career, volunteer activities, deeper involvement with our families, or building social networks outside of work. Finding truly meaningful engagement in retirement may come naturally, or take longer than expected. Planning, experimenting, and involving those close to us in this reorientation of our lifestyles are all necessary. Financial planning is but a part of this picture; an early start and regular review of your financial situation will ensure it is not a deciding factor in what your retirement looks like once it arrives.


VR Business Brokers would like to thank Nicholas J. Miazek CFP for his contribution as a Guest Blogger on our site. Nick is a Vice President and Financial Planner with Fiera Capital Private Wealth in Calgary, Alberta, where he provides customized wealth management solutions and implementation services. Nicholas can be reached at nmiazek@fieracapital.com or (403) 699-9000.

(Photo: Lord Jim, Flickr)