FAQs about Selling a Business
Q - What is the difference between a Main Street and a Mid Market Business?
Main Street is referred to as Small Business with annual sales up to $2,000,000.00. Mid Market companies are considered as having annual sales up to $50,000,000.00.
Q - My business is being marketed by Crye-Leike Business Brokers, now what?
Selling your business is a team effort. As the business owner, you do what you do best - Manage your business to be the best it can be, and we will devote our energy, effort and resources toward selling your business for the best price in the shortest time possible.
Q - I need the sale of my business to be kept confidential. How can we maintain confidentiality?
First of all, if you have talked to anyone (an employee, an industry peer, family members, etc) of plans to sell your company, Confidentiality has been lost. You can never be too careful when it comes to trusting those around you.
At Crye-Leike Business Brokers, we protect our client's confidentiality throughout the marketing process. Once someone has decided to place their business on the market with us, we design a Confidential Information Memorandum), a profile of your business. This document provides general information on the business without disclosing its identity. The CIM generally describes topics such as the business location, products and services offered, key financials and growth opportunities. Basically, the CIM paints a picture that allows the prospective buyer to see a positive, realistic representation of the business.
The CIM is used to market your company nationally to prospective buyers by means of several outlets - including direct mail and online campaigns. All interested buyers must sign a Non-Disclosure Agreement (NDA) and provide a financial statement before any company-specific information can be obtained. At that point we provide enough information for the buyer to make a decision to move forward.
Q - How long will it take to sell my business?
The average Main Street business sells within one year. Of course there are cases where a business sells in three months. Mid market transactions take longer, an average of 1 8 months. We have stream-lined our process to reduce unnecessary, time-consuming steps.
Q - Should I have a Valuation performed on my business, and will that ensure getting the best price?
At Crye-Leike Business Brokers, we can run an analysis to determine a valid range that should be expected for your business. The only way to ensure you are getting the best price for your business is to obtain multiple offers. We market your business to a large bank of buyers to create a competitive bidding situation.
Q - What am I required to do during this process?
Initially, your involvement will be heavy, since we will need to gather information from you or other knowledgeable person, such as a CFO. You will need to provide information that will go into the CIM, including general company history and financials.
Afterwards, the most important thing for you, the owner, is to continue growing the business as if you plan to own it for the next decade. The worst thing that can happen after your business is placed on the market is for the financials to falter, so it is very important that everyone within the business remain focused on meeting the company's objectives.
Q - How long will I be expected to stay on after the deal is closed?
Every scenario is different. If the buyer has a team that can step in and run the business in very short order, your time may be minimal. If a single buyer is the one stepping in and must learn the business, more time will be needed. This is something that is negotiated in the sale.
Q - How important is it that my financials are in good order?
Very. Your financial records is the main ingredient that will be examined by the buyer. While it's not necessary, fewer questions will arise if you have your financial statements audited, reducing perceived risk. This, in turn, can translate to a higher value to the buyer. In many cases, smaller companies (revenues less than $10 Million) do not have audited statements.
Learn More About Selling Your Business with Crye-Leike Business Brokerage
Effectively selling a company is a complex process. One that requires honest answers to a number of questions, including the value of that company. Determining an acceptable price is important, because if the price is too high, the business may not sell and if too low, money is left on the table. The market ultimately determines the selling price, so it's very important to value your business correctly and list the business in the appropriate price range.Read More...
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