Business Planning – Selling your business.

Subtopic: Merlot Air Date: August 6th, 2020

“Failing to Plan is Planning to Fail”

Selling a business is likely the largest transaction you’ve ever participated in. You’ve worked to grow equity and a product or service worth passing along so that you can meet your goals in terms of assets in preparation for retirement. Your due diligence may be the key to selling your business for the highest and justifiable worth.

Where to get started? Gather your team.

  • Industry-Specific Attorney – this person is in place to protect you from a legal standpoint.
  • Equipment Rep – an equipment representative with knowledge of the landscape of your industry can help you determine the quality and worth of the equipment you will be selling with your business. They may make recommendations for equipment repairs or purchases that can boost the price tag as well.
  • Consulting Firm – A consulting firm can do something similar to the equipment rep in that they come in and optimize your processes and can assist in coordinating the transition of your team to the new owner if the situation fits.
  • A Financial Advisor to Quarterback the whole thing. Having an unbiased advisor on your side in the transaction can help you
    1. Make less emotionally driven decisions
    2. Coordinate your team during a stressful period

Now that you’ve gathered your team. There’s a process you can expect.

  1. Evaluate Assets – use the consulting/equipment reps to gather this critical data. Make sure to not put the cart before the horse: meaning, if a potential purchaser approaches you, it’s always going to be best to not give them a price to start, especially if you’ve never sold a business before. If this is a viable buyer, they will most often be willing to wait for negotiations.
    • Real estate
    • Investments
    • Accounts Payable
  2. Analysis
    • Cash Flow
    • Retirement/pension plans
  3. Optimize (This will go along with Analysis as they go hand in hand)
    • Use those analyses provide by experts in their particular field to optimize your business. This may create a lag in the sell, however, if you were approached by a purchaser, it may give you the initiative needed to get the processes in order
  4. Actionable Strategy
    Use your team and allow them to put together the full picture so that you are prepared for the negotiations. You will want to be sure you have the following from your team. Or else you may want to replace a certain player

    • Detailed recommendations
    • Comprehensive written reports
    • Coordination
  5. One part we want to point out as going on “behind the scenes” this entire time. PLANNING with your advisor. Know what you need to retire and maintain your lifestyle. Be prepared ahead of an offer so that you can keep emotions aside.
  6. Sell! And feel confident that you did your part to make the transaction as profitable and justifiable as you could have.