The information below is written primarily for entrepreneurs who are ready to sell their current business. If you are a corporate executive who would like assistance in selling your company or divesting part of your company, Click here for our Mergers, Acquisitions, Divestitures Service, Practice Area.
SHOULD YOU CONSIDER SELLING?
The decision to sell a business is often a difficult one because of the profound personal and/or financial impact. Many different influences bring business owners to this decision, including:
Possible failure of the business if one or more owners become seriously ill or disabled.
- You have built your business for 10, 20, 30, 40 years. You may just be tired. You may just want to go do something else. It is just the right time for you, for your own reasons to sell your business and move on.
- Worrisome exposure to business risks often aggravated by personal guarantee on loans.
- Possible failure of the business if one or more owners become seriously ill or disabled.
- Divorce or dissolving of partnership.
- Owner’s desire to pursue other business interests which may be more challenging or less stressful.
- Lack of sufficient working capital.
- A need within the company for new skills, new resources, or a new philosophy to cope with ever changing economic forces, government regulations, and competition.
These valid reasons and many others for considering a sale, do not imply failure or willingness by the owner to accept less than a fair price for the business.
HOW MUCH IS MY BUSINESS and/or MY COMMERCIAL PROPERTY WORTH?
A business enterprise and commercial Real Estate, like any asset, is worth what a seller is willing to sell for, and what the buyer is willing to pay. Buyers ask countless questions, but they are primarily concerned with a fair return on their total investment. In addition, prospective buyers make many judgments about market position, proprietary know-how, competitive strengths, quality of the assets, growth potential, and risks of the business.
To accurately determine the true worth of a business, the company’s financial reports, prepared primarily for tax purposes, must be understood and restated to reflect the true financial performance of the business.
The CDI Group professional helps the business owner determine the true value of the business and, just as important, helps the prospective buyers understand the reasons for such value and structures a sale for the maximum benefit of buyer and seller. And when Commercial Real Estate is involved, we can provide you with several different kinds of Confidential valuations, as well as manage the sale of both your Business and Commercial Property.
IS CONFIDENTIALITY IMPORTANT?
A special note to you if you are a Business Owner who has Commercial Property and does not want your Business sold until your Commercial Property is sold, we understand that scenario and can take care of you. Business Owners tell us that they are very concerned about Confidentiality when it comes to selling their Commercial Property. We have a way to maintain that Confidentiality while we work with your Business and your Commercial Real Estate. Please click here if you would like to discuss this further.
Sound working relations with employees, customers, suppliers, and bankers are important factors to a business. Any premature indication of a possible change in ownership could disrupt these relations and weaken the company’s competitive position. For these reasons, and many others, confidentiality is critically important at all stages.With the proper procedures, it is possible to minimize the risk of an untimely disclosure.
In every transaction, there is an appropriate time to reveal that a sale may be imminent. Proper timing of these sensitive announcements can contribute to a smooth transaction and reinforce the buyer’s willingness to proceed to a closing.
We help ensure that information is kept confidential throughout the entire selling process until it is appropriate to reveal that a sale is forthcoming.
WHEN IS THE BEST TIME TO SELL?
Usually the best time to obtain the highest price occurs when sales and earnings are good and trending upward. A solid earnings trend will enable a buyer to pay a higher price and still meet his return of investment criteria. A history of good performance also gives the buyer confidence in projected future earnings.
However; market conditions for business sales also significantly affect the salability of a business. Today’s market is the best we have seen in the last five years due to a large number of serious buyers in the market, bank financing is readily available, and the reduction in capital gain taxes nets the owner more cash at closing.
WHO WOULD BUY MY BUSINESS?
For most businesses, there are several categories of prospective buyers. The most obvious are other companies in the same business for which the acquisition would be a logical expansion with potential economies of scale. Consideration should also be given to suppliers and customers of the business.
However, based on our experience, with smaller and mid-size businesses, approximately 80% of the prospective buyers are individuals who want to control their own future. Many of them will be moving into the area from other states and countries. They will consider IT, construction, government contracting, professional services, retail, transportation, distribution, wholesale or manufacturing businesses.
We are in continuous contact with all categories of buyers. We utilize effective search procedures to find and screen those who are best qualified to buy.
HOW CAN The CDI Group HELP YOU?
The CDI Group can help you by using our experience and know-how gained from over 40+ years of owning, managing, buying, selling businesses in the USA and Internationally. We know how to guide the client through all of the complex steps required to sell a business. The first step will be our review of the company’s history and your objective to make sure that a sale is the best course of action. This review includes a proprietary CDI Level 1 Estimate of Value and Financial Overview™. This gives you and us an important view of your business. It also tells us what prospective Buyers and their Bankers will be seeing. There is no hiding from the numbers, so let’s deal with the situation now, not later.
When you, the Business Owner, decide to proceed with the sale of the business, we prepare custom-tailored presentation documents, develop buyer prospect lists from our contact files and other resources, make the proper approaches and screens the buyer prospects, and introduces only serious, qualified buyers to our Client.
We will handle the entire transaction from the initial introduction of the buyer through closing, including coordination with attorneys, accountants, landlords, and most importantly bankers (lenders) for the Buyer if necessary.
An owner may ask: “Why can’t I sell it myself?” The answer is, you can try, but there are several reasons why most owners choose not to:
- An owner representing himself cannot maintain anonymity and the lost confidentiality could seriously hurt the business.
- An owner may not be knowledgeable in current areas of law, accounting, taxes, and marketing of businesses for sale.
- An owner typically does not have the ability or time to contact, screen and qualify a large group of prospects to find a qualified buyer who is serious and will offer a fair price.
- An owner’s talents are much more effectively utilized in running the business than in trying to sell the company.
- An owner generally would not have the experience, knowledge, and negotiating skills needed to sell their company efficiently and for the best price, particularly in a highly emotional negotiation such as the sale of a business where the buyer’s objectives are totally opposite of the owner’s.
- The CDI Group has a trained professional staff knowledgeable and skilled in business transfers and they can make the sale of the business a reasonably pleasant experience. Call us to find out how we can help.
WHY WORK WITH The CDI Group?
Our clients select us to assist them in the sale or purchase of their business for the same reasons: expertise, the way we work with them,and proven results!
You have devoted your time, money, and energy to building, running, and operating your business. It may well represent your life’s work. You may have already decided that now is the right time to sell, and you want the very best professional guidance you can get. The CDI Group’s goal is to secure for our Client the best possible price, terms and conditions.
As a professional who specializes in helping people and companies buy and sell businesses and help financing acquisitions, we can provide you with the following services:
- Compile our Confidential Memorandum describing your company to the market place. This will include recasting your financial statements to accurately reflect the true earnings of your business.
- Provide one or more kinds of appraisals and valuations. Our specialist can provide appraisals and valuations of:
– Machinery and Equipment
– Real Property (Land and/or Buildings)
- Using our financing network, present your business to the SBA, Banks, PEG’s and other financial institutions for pre-approval.
- Market your business confidentially with Blind Descriptions on appropriate websites through our Internet division, including the interactive version of the Wall Street Journal.
- Market your business confidentially using our proprietary CDI 5+ Part Marketing Program to National and International Buyers. Because your business is unique, every CDI 5+ Part Marketing Program is custom designed just for your business
- “Push” your business to our local, regional, national and international brokers through our broker’s network.
- Begin print and trade journal advertising if appropriate.
- Present your business to the several potential buyers we have in our database who are looking for a business like yours.
- Take charge of the negotiating process with the goal of securing the best possible price, terms and conditions for our Client.
- Assist you in the due diligence phase of the sale.
- Manage the closing process.
Professional resources, resourceful people, and a fundamental commitment to creating success for you, that is the CDI professional edge, and we are ready to put it to work for you. Feel free to contact us for a free, no-obligation, confidential discussion about your needs and wants, or complete a copy of our Seller Description by clicking here.