Knowledge Base
Selling your life's work is a very complex and nuanced process - we simplify it for you!
Resource Library
The amount of information to understand in selling your life’s work can be overwhelming. We curated a library of the most common topics, concepts and processes answering the various questions owners have and how-to approach each step along the way.
The Process
Our #1 job is to get you the best possible offer at a great value and sale structure – creating competitive friction to achieve that best offer in a secure and confidential process producing the results you must have!
What a Sales Process Looks Like
Selling your life’s work is a challenging process, and we make it simple resulting in creating generational wealth for our clients when followed.
Steps to Selling Your Life’s Work begins by shifting mindset from an operator to a seller. The duality is challenging as the process is complicated and nuanced. Our job is to make it simple and secure the highest price and best terms possible.
Is there a perfect time to sell? Maybe not perfect, but the best time to sell is when you’re prepared, your industry and your financials are trending up. Is it the only way? Find out the result you must have to maximize your price and minimize your risk.
There are many reasons Why Your Business Might Not Sell. Here’s 3 Reasons Why
When the time comes to sell your life’s work, avoiding the landmines that can cost you hundreds of thousands or even millions of dollars is paramount. Here are some Mistakes to Avoid When Selling Your Business.
Goals & Objectives
It’s critical for you to look beyond the monetary value of your business to what those proceeds provide for you, your family and your employees. If you only focus on maximizing to the last dollar, you will eventually be disappointed.
You’re at a crossroads – torn between taking some chips off the table and sticking it out? The more you know, the better your strategic decisions will be. We take a look at Why Sell Your Business and Why Sell Now. Knowledge is power and educating yourself ensures your opportunity sells for maximum value. There are significant disadvantages and risks to waiting too long to sell.
How much do you need – the $10MM question. Everyone has different needs, wants and goals post-closing. With no OSFM plan that will work in any situation, the answer to ‘how much’ question requires introspection and analysis. Find out ‘How Much’ here.
It’s easy for owners to underestimate the emotional side of selling life’s work. Preparing for those emotions may be more important than the financial side. The Emotional Side of Selling Your Business
Saying goodbye to your company, co-workers, and friends who’ve been a significant part of your life is beyond dollars and cents. Life after the sale is about What’s Next?
Preparation
You have worked hard to grow your business, and you should be awarded the valuation you deserve. When you put yourself in a potential buyer’s shoes, you’ll see your business with fresh eyes.
It’s your decision only! Likely the most difficult decision to make is when to sell your life’s work. Making this decision on your terms in your time is far more beneficial than having the decision made for you. Move away from your life’s work to selecting someone to buy your transferable asset is what matters most. Is selling your business now right for your situation?
We help you sell now or later, when you decide you’re ready. Now is not the time for shortcuts! Readiness Planning Checklist simple, practical & powerful advice to prepare your life’s work for transition, to sell a cash-flowing asset and exit. We provide actionable intelligence to improve your company’s position. Learn about our Assessment here. If you’re more of a visual learner, then here’s our 12-point Checklist to be better prepared.
Control Calculators: Break Even Calculator, 3 Profit Models, The Financial Trinity (Cash Flow, Balance Sheet, Income Statement), Amortization Schedule, Loan Comparison, Million Dollar Runway, Retirement Calculator, A/R Aging, Customer Acquisition, Capital Investment, Lease – Buy Options.
Project Profit Calculator: Sell you projects for the proper margin.
Transaction Calculator: Cash conversion, NOPAT, WACC, Operating Leverage, Financing, Incremental Margin
Purchase Price Adjustments: Net Working Capital (“NWC”) targets and purchase price adjustments are a universal reality in private M&A cases. The peg, mechanism and calculations are just a portion of elements for consideration.
Be Prepared Son! Most business owners spend decades building and shaping their life’s work. Hard to believe only mere months do most think about selling an asset that took decades to build and incredibly they will only take a few weeks preparing their exit. What in the actual &*%$ are you doing! The chasm between intention and preparation is as wide and deep as the Mariana Trench. Might as well admit it, You’re Not Ready
Price v. Value
The most important distinction between price and value is the fact that price is arbitrary and value is fundamental. Price is what a buyer is willing to pay. Value is fluid and your hard work demands a valuation you literally can bank on.
How much is your business worth? You can’t sell your life’s work if you don’t know its worth. We employ certified valuation experts well versed in valuing businesses. If you’re contemplating selling your business, raising capital, investor equity, pursuing a legal claim, dealing with partner disputes or a divorce, succession planning or an IRS-related events you must obtain a valuation report.
Our gap analysis process compares a businesses current performance to the performance expectations of potential buyers to help you identify any opportunities or shortcomings. A valuation strategy is part of the preparation process and is created to overcome any issues and improve business operations. Review gap analysis here. A gap analysis can be completed in four simple, powerful and practical steps. Here’s a list you can begin to implement on your own. Value Drivers.
Your business is more than blood, sweat and tears. You’ve sacrificed for years and you want to get the highest price possible when it’s time to sell. Some buyers may not have the same belief in the price you want. A gap exists you want ‘X’ more money than a buyer is willing to pay. We created a tool to evaluate and to close the gap between what a buyer will pay (current valuation) and your desired valuation.
Quality of Earning (QofE) is a value-added way to estimate the future performance of a business. This assessment of earnings more accurately reflect operational efficiency. The report also analyzes historical revenues and expenses, sales and major customer concentrations and expense add-backs prepared by our team of NACVA-certified Master Analysts in Financial Forensics (MAFF) and takes approximately 4-6 weeks. Learn more here
Your Dream Team
Preparing your business for sale is made easier with the help of an advisory team – Legal Counsel, Tax Guidance, Accounting Expertise, Wealth Advisor et al as required. Lay the groundwork early to lead and direct other advisors to your goal – a successful sale!
It’s time. Time to take some chips off the table while there’s time and tread left on your cleats. Drafting Your Deal Team is a critical step in realizing your personal and professional goals. Take a look inside the war room of what it takes to secure a successful exit on your terms.
You Get What You Pay For! Take a closer look into the large and fine print of the costs associated in selling your life’s work. Selling your life’s work is a big deal! Hopefully, you’re reading this article several years ahead of beginning a sales process. If not, wrap your arms around the facts, complexities and nuances for your personal, professional and financial future. Selling is a big deal!
We are your Master of Ceremonies, the QB, the point person on your business case. We prepare and stage all events, conferences, and meetings for all parties associated with your unique business case. We are response-able for leading and maintaining each phase and speed of your case up through certainty to close ensuring you receive the highest possible price for your business.
Confidentiality
A relationship built on trust, respect and loyalty establishes an efficient exchange of sensitive information. As your M&A Advisory, our adherence and proven strategies to a standard of reasonable care ensure your case is confidential from beginning to end.
The process of selling your business process requires careful preparation and execution. One of the most critical aspects of a business case is establishing and maintaining confidentiality. It’s essential drip information into the market appropriately timed and avoid damaging a business’s reputation, disrupting operations, or creating unnecessary anxiety among employees, customers, and suppliers by oversharing. Here’s why it’s so important and how we set ourselves apart from other advisory’s.
Many sellers love to be part of an auction process as it can generate higher price for your business. Buyers loathe an auction process as it muddies the water and creates noise in the system. Every case we’ve been a part of the best buyer, in our opinion, has always offered the highest price to our clients…every single one. We will have your business prepared and attractive to the universe of strategic and financial buyers by leveraging friction and confidentiality. It’s not counterintuitive. It’s proven, simple and powerful.
Marketing
The best marketing strategy is a profitable business attracting buyers willing to pay top dollar! Here are the most effective ways to confidentially market your business for sale.
A teaser is a first impression document in a process giving potential buyers a brief, anonymous snapshot of a business. The practical goal is to generate interest, screen buyers, and preserve confidentiality at the earliest stage of outreach. A strong teaser helps the right buyers raise a hand quickly, filters out tire kickers and is our initial step in generating competitive friction.
The Confidential Information Memorandum, CIM or pitchbook is the sales presentations we use to convey a clear, concise and compelling reasons why acquiring the company makes sense for a potential buyer. Pitchbooks contain multiple sections on the merits of the transaction, pricing and valuation information covering all of the workstreams for a successful case like yours.
The Buyer Funnel is the easiest, least difficult element of a transaction. We chuckle when sellers exclaim, “I found the buyer and all you have to do is wrap it up for me.” Yeah, that’s not how it works Mr. George! We use CapitalIQ, Pitchbook and a couple others. Aggregating a list of buyers is easy. Getting your unique business case to the finish line is where the work occurs. The differentiator is how we create competitive tension and leveraging the IOI process.
IOI & LOI
The Indication of Interest (IOI) is an essential starting point – the first note in a symphony – setting the stage for a competitive process. The Letter of Intent (LOI) is the most important document in your sale forming the basis of your transaction.
We prefer a two-step process when we have a prepared client. Two forms of consideration – an IOI or Indication of Interest and an LOI, a Letter of Intent. Both have non-binding components and serve different purposes. Simply stated a two-letter process creates competitive tension. We assure you there are binding elements in the LOI preventing a seller from “Passing Go or Collecting $200” when under exclusivity. DON’T SIGN the damn thing without your advisor AND legal counsel reviewing it. Learn more here…
Do you remember what they say in Keokuk? No one wants to make a mistake! Well, we disagree. The way you learn is how you evaluate the mistakes, the failures and apply the new learning into the next situation. However, in selling the transferable asset that is your life’s work, you cannot afford to fuck it up. These 24 elements can get you in trouble! Lean in and lean on the expertise who execute cases, like yours, day-in and day-effin out. What you CANNOT DO is make this mistake. It WILL COST you millions and it’s no joke!
Hands off the wheel and feet off the brakes as you enter the car wash! When your business goes into market, it’s critical to remember you’re the one in charge here as you’re selecting the buyer. Stealing the idea from ESPN, we use a Car Wash to quickly assess the initial list of potential buyers. We provide a coordinated ‘Behind the Scenes‘ look at you, your business, the buyers, their process and you choosing the one for you. We capture all those great moments!
Due Diligence
This phase of a transaction can be the most difficult to those unaware and unprepared. The process of scrutinizing the financial, legal, and operational facets of your life’s work. We ensure you’re totally prepared and your case won’t die!
Due diligence: some have likened it to a never ending proctology exam. Others have characterized it as invasive as a kidney stone extraction. Here’s what neither of those examples admitted…they weren’t prepared! It’s your sale and it’s all under your control. What makes it bearable is having an advisory team guide you through it from cradle to grave. Here’s what diligence looks like!
Be prepared son. Be prepared.
Download our Sample Diligence Checklist here. There is no perfect all encompassing comprehensive diligence list as every case, transaction and buyer’s requirements are different. Use it as a tool to make time to prepare each workstream.
Deal Structures
The Terms & Conditions to a mutual agreement for your business case. This process of prioritizing the objectives ensures the top-priority objectives of all parties involved are satisfied along with accounting for the risk each party must accept.
Typical deal structures involve assets, liabilities or stock sales. What’s important to every seller is maximizing the cash in hand payment and minimize any contingency settlements. Proper preparation prevents buyer identifying defects as leverage to reduce your cash in hand. Trust and humility are powerful tools against deal structure constraints. A buyers focus is to minimize risk shifting it back onto you – death by a thousand cuts. Additional structures include seller financing, third-party financing, rollover equity, earnouts and clawbacks.
One of the most misunderstood parts of a transaction is indemnification, because business owners become terminally focused on purchase price. Sophisticated buyers focus on what can be clawed back later. The imbalance matters – this IS the slippery slope! But wait, there’s more! Regardless of the transaction structure, there’s a possibility of successor liability. Disputes post-closing will be governed by the terms of the purchase agreement. Much of the Agreement language will concentrate around Reps & Warranties. Representations are statements of past/existing facts, and Warranties are promises of the stated facts you’ve given will be/are true.
Closing
The emotional and financial execution of the sale of your life’s work. This section involves the legal contract between buyer and seller, negotiating the purchase agreement, earnouts, rollover equity to resolving post-closing disputes.
I Did Not Plan for the Taxes! This is the #1 reason a business owner removes their business from market. We can guide you, encourage you and recommend you have your CPA calculate how much after-tax net cash in hand you need to consider selling your business whether it’s a stock or asset sale. We can’t make you do it! The sooner you know where you are, the sooner you can work towards where you must go! Learn more…
Transition
From officially transferring your business to the buyer at closing, understanding transition periods, logistics & mechanics of the hand-off to letting go of your business and entering your next chapter.
You built it the right way. The management team has been running at full go for the past 3-5 years now. The wire hit the bank Friday and the celebratory dinner was the best $10,000 evening you’ve had in decades! But, now is the time to give them the keys and go enjoy life in the new chapter.
Selling the transferable asset that is your life’s work can be one of the greatest days of your life provided you’ve done it the proper way. Travel the world, time with grand kids, volunteering and countless other ways will be your new passion. You will spend more money than ever between 60 and 70. You will spend less money than ever before between 70 and 80… just ask your wealth advisor if he hasn’t already shared that with you.
Saying goodbye is never easy!
