Selling a Business Process
The process of selling a business involves a lot of hurdles, paperwork, and emotional baggage. After all, it’s not easy to have to let go of your venture after all the hard work and money invested in it. In any case, hiring the help of a business broker in New York City can save you lots of headaches and relieve you from the technical encumbrances, if not from the sentimental ones.
Whenever you sell a business, there are various milestones that need to be set up. Let’s unpack them for further elaboration.
1. ASCERTAINING YOUR EXIT STRATEGY
Whenever you want to leave your trade in good hands while securing a successful transaction, you have to plan your exit strategy. This involves looking for the best selling opportunity, determining your buyer’s ideal profile, considering remaining as a consultant, among many other variables. Looking for the best exit strategy can definitely impact the value of your business as you seal the deal.
2. HIRE A BUSINESS BROKER IN NEW YORK CITY
Some people are wont to do things on their own, without the aid of business brokers. New York (NY) has some of the best business agencies in America. Relying on a good business broker in New York City, a place known for strict regulations in this area, can really boost your selling speed and profitability while ensuring compliance. It’s also great even when a family member is involved, as the broker will manage to “keep it professional” and smooth any rough edges during negotiation.
3 . PERFORM A FINANCIAL REVIEW AND PRICE VALUATION
This is the part where you’ll define the strength of your company. Financial reviews measure gains vs. losses and how profitable is your business in reality. This is no small matter, and most business owners won’t be capable of drawing up all the financial data required without the help of a business agent, who is, by default, equipped with the tools and expertise to give out reliable EBITDA.
The broker, to attain this goal, will require from you some documentation in order to proceed with the fair price valuation, such as tax returns, asset lists, mortgage, leases, and other relevant documentation. It’s crucial that you don’t hide anything from him/her, and that price isn’t set too low or too high in order to be able to sell and not lose money down the road.
4. PLAN YOUR MARKETING
Now that you were able to find a price range for your business, it’s time to make the offering. The initial price is usually the highest within the range in order to allow for some bargaining on the part of the investor and/or other business brokers. New York (NY) brokerage firms usually possess a shortlist or database from which they’ll be capable of choosing potential investors that fit your company’s criteria, but, additionally, they normally post ads in various business marketplaces.
The advertising material consists of a packet that comprises about 30 to 50 pages of relevant content (including a CMI or confidential information memorandum) that the buyer would want to read in order to define whether the business opportunity matches his/her goals and expectations.
Your business broker will assess the financial strength of the candidates before moving on with the submitted letters of intent and the offers presented. Then, after the best offer is picked, comes negotiation.
Negotiation is the trickiest part of the process and having a good business broker in New York City whom you can trust is _KEY_to make sure it goes smooth. Each of the parties usually bring their lawyers at this stage to draft the purchase agreement.
6. WRAP UP
During this final phase, the preliminary agreement is signed and the parties set up a closing date with a window for wiring the funds, particularly when the buyer applies for a loan. When the closing date arrives, if everything goes according to plan, the final contract is signed with the corresponding attachments and the deal is done.