Finding a buyer is hard. And to a buyer, finding a seller is equally difficult. Openly marketing your company might startle your employees and customers. Most sellers rely on fee-driven third parties for confidential introductions to buyers. But what if you could easily find and confidentially speak directly to a buyer?
The quality and reputation of your legal and accounting advisors speaks to your character. Same goes for the buyer. Top legal, accounting, and financial firms do not represent sketchy buyers. Ask the buyer who their legal and accounting firms are. Honest buyers are happy to provide letters of engagement from their advisors.
Selling a business is probably the biggest transaction of your life. It's time consuming, emotionally charged, and to protect your privacy it's mostly conducted off-site, away from staff. But the process is well documented and widely accepted. Here is a high level overview of how to sell your business.
There are several ways to determine enterprise value. Discounted Cash Flow (DCF) and multiples of EBITDA are widely used methods. In the end, a business is worth whatever the market is willing to pay given current conditions. A fair price, acceptable to both parties generally aligns with the Business School formulas.
Initiating contact with a buyer costs you nothing. However, once you agree to follow through with a sale, there will be an additional demand on your time. It's important that you balance your time between the sales process and running your company. A seasoned buyer will want to avoid disruption to your business as much as you do, and will accommodate your unique situation.
You're staff is like family. You've probably cut your own compensation during lean times so they wouldn't have to. They've been there through thick and thin. Identifying a buyer's post-acquisition plans early on can be a deciding factor for you. Will the buyer use your company as a platform or will it be a bolt-on or tuck-in? Is the buyer a strategic or financial buyer? Ask the buyer to explain their vision.
There is one question you are afraid to ask.
You dare not even think about it.
I've been through multiple start ups and exits. I know what you're going through. Let's connect and I will share the single most important question sellers never ask or even think about until it's too late.
When I finally learned how to ask this question, it was life changing.