Menu
SELLERS wait until the time is right.
Selling in optimal health- produces -the best ROI, the best-selling price.
Owners ask:
10 more years? What changes? Health will be? Aren’t we ready? Do we deserve (our time now)?
If I sold today & converted this to PASSIVE earnings, why am I still working?
(good friends are enjoying the snowbird life & living the time of their prime, etc.)
Selling a business is not an easy or quick process. We tell clients to plan on 6 to 12 months to find the right buyer. Given that the SBA recently revised their stats on time to sell being to up to 26 months citing Covid & logistics activities have delayed the process as of late, this can vary.
We have listed and sold businesses in 3 months, but this is not the norm. There are many steps that must take place from when you decide to sell up until the day of closing with a check in hand.
We protect the company and contact approved buyers through a blind profile – a document describing the company without revealing its identity.
Selling a business is time-consuming for owners; we help the owner maintain a focus on business profits while the broker is working on the sale.
We have buyers, tools and resources to maximize exposure.
We help present your company in the best light to maximize the sale price. We understand the key metrics that buyers are looking for and help identify changes that can lead streamline the path to a better selling price.
Putting a value on a business is far more difficult and complex than valuing a house. Every business is different, with hundreds of variables that have an impact on the value. Business brokers have access to business transaction databases that can be used as guidelines or reference points. But the best way for a business owner to truly feel comfortable that he got the best deal is to have several financially viable parties bidding for his business, which is much more likely using the resources of a professional business broker.
Most corporate buyers have acquired multiple businesses while sellers usually have only one sale. Tangent Broker helps level the playing field for a business owner making his one-and-only business sale.
Because our sole function is selling your business, Sellers can close a deal in less time. The faster the sale.
​1. Does maintaining your sales require you to focus on your customers?
2. Do you have years of interested buyers in your database?
3. Does negative feedback change your attitude with clients for the day?
4. Could you lose a client while you’re focused on selling your business?
5. Could your employees overhear these daily conversations (near your office door), will word spread, will you lose employees?
6. How much experience do you have in selling businesses? Do you have seasoned experience in selling businesses?
7. Are you prepared to pay the price of any mistakes?
8. Can you independently negotiate with the buyer yourself (FSBO)?
​Have Business owners developed the skills or time to sell their business for a premium price?
You’ll be involved in the sale when you’re needed to answer broker or buyer questions.
You will be coached on DO’s & DON’T’s, how to handle questions & deal with objections.
You will speak with a wide range of prospective buyers, but this remains confidential to your clients, vendors, employees, and other parties until the sale is finalized and you have the funds, and they have the keys. You will typically stay for 30 days for free, after the sale.
More exposure equals more interested buyers, and in most cases, this will likely lead to a higher selling price. It is estimated that a business sold by a professional broker will sell for 20% more than a business sold by the owner. Tangent Brokerage has relationships with preferred SBA lenders across the U.S. This means you will sell the business, rather than holding a note for a large portion of the sale.
Call us for a free-no obligation Brokers Opinion on what your business is worth.
Â
Buyers pay a premium if the business can run much of the time without you for day-to-day operations. When you delegate responsibility to key employees and involve your key staff members in the decision-making process. Demonstrating that your company relies on your well-trained employees provides a premium in the marketplace.
Having job descriptions, procedures, company policies, budgets and goals (for sales, production, customer service, etc.) helps buyers have confidence that the company has these matters documented & defined in advance after the existing owner is no longer running the business (i.e. franchises are popular, as policies, procedures, goals, budgets & other operational matters are everything is documented, defined & used to operate the business). Buyers then have comfort that they will be able to maintain your success. Keeping documentation such as sales, expense reports, financial statements and tax returns also helps obtain financing.
Brand recognition, customer awareness and reputation are part of your goodwill business value. A diversified client base helps balance industries during the economic business cycle; this includes black swan events such as Covid, when businesses were segregated between essential & nonessential businesses.
The prospective buyer seeks to understand how much actual cash flow the buyer will receive when they step into the seller’s shoes; we will prepare an Owners Benefit statement; this helps the buyer understand how they can plan their future and what price will work for the buyer when they make an offer. Meanwhile, keep your cash flow as high as possible while we are in the process of selling your business. Minimize all distractions.
All Assets required to run your business in a manner that maintains that same income are essential; However, some Assets are deemed not-essential (i.e. obsolete inventory, personal assets, unused equipment, etc.), and may be sold or otherwise disposed of.
Buyers pay a premium for both specialization in a unique niche that provide a competitive advantage and industries having barriers to competitive entry, yield an advantage in the marketplace. Also, equipment valuation may be added to the sales price, but not always, this depends on many factors.
Does your business look clean and organized? First impressions of the buyer’s visit are lasting. A well-maintained facility helps obtain the best price. A thorough cleaning and organization conveys a good feeling when they arrive.
Most business owners only sell a business once, after years of hard work developing their business. Understanding this process involved will help produce the best results, but some misperceptions can derail your plans.
The market sets a value; this is based on buyer’s funds, industry, interest rates, the business cycle, money tightness but no two (2) businesses are identical; Businesses have different employees, processes, sales, earnings, capabilities, growth, hiring strengths, logistics, lending arrangements, credit lines, key suppliers & other competitive advantages or weaknesses in the marketplace, etc.
Personal readiness is one factor; the economy, health, key employees/customers, rent rates, lending environment, essential business classification, etc. -all impact on the sale of a business.
The marketplace dictates your business valuation. Several methods are employed to arrive at a marketplace valuation. Buyers analyze the historical cash flow, but the sale price will be affected by the industry, capital investments, interest rates, unemployment, economic cycle and many other variables.
Selling a company is far more complex than selling a house. A successful business sale requires analyzing cash flow, maintaining secrecy with employees, customers & vendors, recasting financials, obtaining NDA’s, ensuring the world knows general information until the time is right to share more detailed information on the business.
Even after the business is sold, the seller typically trains the buyer for 30 days of training included with the sale. However, the seller can also remain on as a consultant, remain the face of the company or simply be available via cell phone whenever the new owner has a question if it arises at all.
The Income Approach takes into consideration the company’s level of earnings using a capitalization rate, discount rate or multiplier. Several income approach methods are frequently used. Each method requires a level of earnings and a conversion factor to translate the earnings into a company’s value. Selecting the proper level of earnings – after-tax, pretax, discretionary or cash flow – and matching it with the proper conversion factor – discount rate, cap rate or a multiplier, along with seasoned judgement, helps us determine a reasonable value.
The Market Approach sets a value based on the values of other businesses that have been sold. Setting the market value involves researching the sale prices for similar businesses in a geographic area. In some cases, however, finding a company that is similar in many ways to your company may be difficult.
Whatever your goal, you want a good advisor to help you assess the value of your company. Question your advisor on the effects of deal structure and how multiples are used. A business owner should never accept a computer-generated valuation or a one-size-fits-all approach when selling the business. And don’t be impressed by the person who presents the highest value – you may only be setting yourself up for failure during the sale process.
Provide a resonable return on their investment Lending institutions will also be examining whether a buyer’s coverage ratio, or acesss cash flow after all debt paid, is adequate to cover their needs.
Due diligence is the verification process of being reasonably sure that the financial statements are fairly presented, prior to executing the business purchase and closing the deal.
For someone considering a merger or the purchase of an existing business, the answers to your due diligence questions are critical. Complex processes are time-consuming; this often happens during back & forth questions via the Business Broker, many of these questions will be answered and then you’ll meet with the accountant to provide sufficient competent evidential matter regarding the areas of Buyer concern. Once the Buyer has been satisfied with their concerns, the deal can become executed.
During the due diligence process, some of the documents will be provided as follows:
Due diligence may take considerable time, your Accountant will meet with the Seller’s CPA and review the documents you need until you’re comfortable with the business. The Sellers’ financials will be the focus and your accountant will confirm their comfort level. Next step is closing the deal and depositing the Seller’s cash flow into your bank account(s).
"*" indicates required fields