Selling Your Business With Confidence and Ease
Selling Your Business
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Our team collects and analyzes financial and operating information about a business and then applies this information to 12 different valuation methodologies in order to provide our clients with our opinion of what the Business is most likely to sell for in the current marketplace.
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After providing Sellers with our opinion on the Market Value of their business, we then confidentially market the business by creating a high-level Teaser document that provides potential buyers with just enough initial information to determine whether or not the business is of interest to them without disclosing the identity of the business or its owner, in order to ensure confidentiality.
If a buyer is interested in receiving more information on the business, we require them to complete legal disclosure documents before providing them with our Confidential Information Memorandum – a detailed marketing document designed to provide an overview of the business that can be used in making an offer on the business and to secure financing is the offer is acceptable to the Seller.
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We use a number of approaches to market the Business which include Sunbelt network contacts, targeted searches and solicitations and Sunbelt network and industry affiliate websites. Most importantly, our proprietary internal database of which includes over 1,000 pre-qualified buyers that have contacted us in search of purchasing businesses that meet their specific search criteria, allows us to begin initial discussions with a large number of qualified prospective buyers immediately once the business is ready to be taken to market.
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Managing the negotiation process is another critical role that needs to be managed carefully which our Brokers our experienced in. There are many moving parts in a business transaction, and Sellers may underestimate the importance of an intermediary who understands the “ins and outs” of a well-structured agreement. Ensuring that all facets of this process are addressed at the appropriate time is critical to a successful outcome.
Additionally, Our Brokers facilitate the often-undermined due diligence process with the prospective buyer as well as the Buyer’s lawyers, accountants, financial and business advisors, carefully disclosing the right information at the right time in the process and ensuring that the deadlines are met to keep the process on track towards Closing.
Importantly, our Brokers will take the lead and use our years of experience and training to navigate through the numerous obstacles that present themselves in the process, all while allowing you as the business owner to maintain your focus on doing what you do best, which is continuing to stay focused on running a successful business through the process, ensuring that maximum value can be achieved for you come the closing date.
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Sunbelt is actively involved in the transaction from initially valuing the Business through to the final stage in the process – Closing. Our Brokers synchronize all parties involved in the transaction (Accountants, Lenders, Landlords, Franchisors, etc.) to avoid any delays in the process and to ensure a timely and successful transaction.
Tips on Exiting Your Business
With such a healthy market of quality businesses in Canada, and half of those planning to transfer control within the next five years, it’s no surprise business owners will be advertising to a very competitive marketplace.
Below are some tips for letting go of your business and protecting its value, so you can increase your personal wealth and reduce the taxes you will need to pay on the proceeds.
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For the best results, start planning early, allowing at least six months to analyze the business, two years to build value and take advantage of tax strategies to maximize the proceeds of the sale, and another year to sell. Unfortunately, not all business owners have the luxury to plan that far ahead, sometimes driven by unexpected circumstances. Every transaction that we work on is unique and tailored to the specific needs of our clients.
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Identify changes and improvements you could make to add value. Training key employees and making yourself replaceable is a good place to start. A business is more attractive in the eyes of buyers when they know that there are resources in place to successfully run the business once ownership transfers.
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Engage tax, accounting and estate professionals and work with them to structure your business so that you can maximize the proceeds of your sale and pay no more tax than necessary. The two primary tax structures in the sale of a business are the shares of a corporation and the assets of a business. Tax considerations and lead times differ with each option. The difference between the cost of the shares and the sale proceeds is considered a capital gain. By taking advantage of the lifetime capital gains exemption (LCGE), share owners can potentially receive capital gains on a tax-free basis. There is, however, a 24-month hold rule to claim capital gains exemption. Share ownership can be split among family members or placed in a family trust so that the tax benefit can be used by each member, thus allowing a much larger tax-free capital gain.
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Engage an experienced business broker from a reputable firm. Business brokers understand the business sale process, know how to accurately price a business and find/work with buyers. A prudent business broker will maintain confidentiality throughout the sale process, successfully negotiate offers, manage the buyer’s due diligence and address other items that need careful balancing to bring the deal to a conclusion that works for all parties. Before engaging in this important transaction, you should request referrals or testimonials from successful transactions the broker has previously worked on.
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Poor record keeping is one of the biggest roadblocks in selling a business. Ensure that your books, records and financial statements are up-to-date. Prepare at least three years’ worth of financial history. Documents need to be current and correct, demonstrating timely remittances and filings.
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The Most Probable Selling Price (MPSP), prepared by our team for the seller’s eyes only, represents what your business would most probably sell for on an open market as is, in use, and in place. It factors the true earning potential of your business, the current state of your business, the associated risks and what the market is would be willing to pay for your business. A seller’s expectations need to be in line with the market reality in regards to the most probable selling price (MPSP) of the business, as well as the length of time it may take to sell the business. While there are many factors that affect the time that it will take to sell a business (the asking price, the buyer’s ability to secure financing to purchase the business, local economic conditions, the nature of the business and where it is located, etc.) a period of 6 to 18 months is typical.
Why chose Sunbelt?
Below is a quick overview of the benefits and services provided by Sunbelt
Managing Confidentiality
Confidentiality is a critical factor in facilitating the successful sale of a business and maintaining maximum value. Due to the potentially disastrous consequences, you will likely not want your staff, suppliers, lenders, customers or competitors to know that you’re company transfer. We manage confidentiality throughout the entire process beginning with our initial discussions, through to the closing of the deal.
Valuation
Identifying and presenting the true value of your business to prospective buyers is a complex task. In most cases, your financial statements do not reflect the true benefits of ownership. Our firm will utilize a number of financial models in our valuation process in order to determine the most appropriate method to present the real value of your business to prospective buyers.
Preparation
A list of items must be addressed in order to prepare both you and your business for sale. Our team will help identify key deal components and manage the preparation of your business at various stages in the sale process to ensure that you are as ready as possible when the time comes to hand over the keys.
Positioning for Success
Properly positioning your business in the minds of prospective buyers is critical. Our team will ensure that the merits of your business appeal to the right buyers and that they fully understand the potential of acquiring your business.
Marketing your Business
Our team has experience confidentially marketing businesses to targeted, strategic buyers, as well as pre-qualified buyer prospects from our exclusive, internally maintained lists of potential buyers.
Screening Buyers
Our team screens potential buyers to avoid wasting your valuable time with unqualified buyer prospects. We confirm if they have the financial capability to buy your business, and help to determine whether or not they’re the right potential fit to run your business successfully.
Managing the Sales Process
Many details require attention in the process of offloading your business. Addressing these details in a timely manner and managing each step of the process in proper order is critical to a successful outcome. Our team will keep the deal on track and keep you fully informed every step of the way.
Professional Recommendations
A team of advisors is often required to sell your business, protect your interests and maximize your bottom line. From accountants and tax specialists to lawyers and wealth planners, we have a network of exceptional professionals that we can recommend.
Negotiating the Deal
Understanding your unique needs and objectives as well as those of the buyer is critical to negotiating a successful agreement. Our approach to facilitating successful win-win deals is one of the reasons that we sell more businesses than any other business intermediaries in the world.
Developing Creative Solutions
Selling a business often requires many rounds of creative problem solving. From structuring the terms of training and transition to creating the best approach to minimize tax on the sale, our team provides creative problem-solving expertise virtually 24/7.
Focus on Operations
Our team takes responsibility for selling your business so that you can continue focusing on its operations, ensuring that your business remains in top performance in order to ensure maximum value when the right buyer is brought to the table.
Independence
Sunbelt is a global network of business intermediaries with a sole focus on facilitating private business sales. We are independent from any potential conflict of other firms/advisory groups who may be influenced to deal with specific accounting, legal or other advisory groups. Given this independence, we are able to market your business for sale to the largest number of potential buyers, therefore ensuring maximum value for your business.
Ready to take the next step?
If you’re thinking about marketing your business, reach out to one of our advisors today and learn how Sunbelt can help you through the process.