You love your company but it’s time to let go – or … is it? How can you be sure it’s the right time to sell, and how can you be sure all your hard work won’t be devalued and your long-respected company name damaged? Even if you're not thinking about selling your business right now, it's worth considering what it would take to position your business for sale; it also might be a good opportunity to look at your company from an outside perspective. We spoke with Brian Bond, principal of Strategic Business Brokers Group, a brokerage firm in Scottsdale, Arizona that has helped contractors sell their businesses throughout the state. The Arizona Business Broker Association recently named him “Broker of the Year.”
“When it starts crossing your mind daily, then it is time,” said Bond. “Maybe you are starting to feel burnt out, not as creative, and not looking to grow the business. These are signs that it’s time to exit.” Try to put it on the market before you let it slip, he suggests, because it will be an easier sell – and more lucrative – when the company is trending positively. “When it is starting to trend negatively or starts suffering it may lose some of its value,” he said, adding that it’s a good idea to contact a company like his to explore your options as soon as you start to consider putting your business up for sale.
You need to make sure your ducks are in a row, he continued, so your prospective buyer doesn’t think you’re a quack. “Have your financials in order, have your equipment well maintained and make sure management is in place, well-trained and cross-trained. Make sure there aren’t any outstanding legal issues that need to be addressed,” he said. Along with that, get your paperwork in order “It’s necessary to have proper documents, P&Ls, and tax records going back three to five years.
A brokerage such as Bond’s can help you determine your company’s worth, so you’re priced accordingly in the marketplace. “We look at a number of different variables from financials, value of the assets, the owner’s role and how many hours they work a week, depth of management, quality of the books and records and how clean they are, if you have contracts, and how long the contracts are for,” Bond said. “We look at a number of different variables, how the business is trending year over year etc., to gauge the company’s value.” Having all this assessed will help you decide if it’s a good time to sell – if you’re looking for that million dollar plus deal to retire, and it turns out your company is worth substantially less, Strategic Business Brokers Group can provide exit strategies to assist in reaching your goals.
Finally, what happens when you let go? Bond notes that most conscientious business owners try to make sure their employees will keep their jobs and customers continue receiving the same level of service. “In general I think that most sellers feel comfortable with buyers because they have the chance to vet them and go through the process with them. This helps ease their concerns knowing the person they are passing the torch to is going to take care of their employees and customers,” he said.