Steps to Selling Your Business

Steps to Selling Your Business

Indiana Equity Brokers uses a unique process that maximizes the chances to selll your business at the highest price possible.  The process has been refined over the years and has been proven to be successfull time and time again. Our brokers have decades of collective experience in selling over 300 businesses.   

Here are the steps to expect during the process of selling your business:

1. Initial Meeting
 

The first step is a no-cost, no-obligation meeting.  We will talk with you to learn more about your business, the value drivers, and what makes it unique.  We will tell you about our firm, what we do and how we do it.  We will go into detail about everything you can expect in the process.  We will ask for some basic financial information on  your company to perform a free valuaiton.  The valuation will give you a good idea of the value of your comapny on the open market.  Of course, everything we discuss is completetly confidential.

2. Engagement, Packaging, and Marketing

Engaging Indiana Equity Brokers consists of executing an exclusive listing agreement.  We will present you with the agreement and you can have as much time as you need to review.  Then, we will begin to gather all the necessary information to package the business.  We have an easy to follow questionaire and checklist that helps us get all the required data.  We use that and other informaiton to build an excellent marketing profile or offer memorandum.  The marketing material will highlight your business' greatest differentiators and assets.  The offer memorandum is used to market your busienss to our own network of thousands of prospective buyers, as well as markeitng your business via the internet, strategic direct mail pieces, newsletters, telelmarketing, and more.  When we do this, we go to great length to keep the identity of your business confidential.  We have a very unique process to help with confidentaility that we can discuss in our meeting.

3. Finder a Buyer

Due to the various markeitng channels, inquiries will begin to come in to our firm.  We begin the process of pre-screening buyers to ensure they're serious and financially capable of purchasing your business.  Every buyer will be required to sign a Non-Disclosure (NDA) and a non-compete.  We typically meet with buyers to educated them on the buyer process and learn more about them.  We will then present the buyer's information to you for approval before we release any sensitive information such as your business' name to them.

4. Buyer Meetings

We will literaly talk to hundreds of potential buyers during the typical sales process.  You will most likely need to talk to three or four before the deal closes.  The meeting will take place between you, the buyer, and your broker from IEB.  The buyer will learn more about you and your approach to the buisness.  You will get to know what the prospective buyer is all about.  This meeting is usually high level and releated to strategy, company history, operations, etc.  We don't go into detail about the financials and any fact-checking is handled after an offer has been accepted.

The location of this meeting can be anywhere you like.  It can be at your facility, our office, or off-site somewhere.  Eventually, a buyer will want to see your facility and we can arrange this after hours if needed.

5. The Offer

When a prospective buyer decides they want to buy your business, the formalization of that is typically with an “Offer for Purchase” or “Letter of Intent” (LOI).  This document outlines the details of the offer – the offered purchase price, the payment terms, the training and transition period, any required employment agreement or non-compete agreements and any other conditions related to their offer.  We’ll meet with you to explain the offer and discuss its various components.  You can decide to accept the offer, reject it, or negotiate on certain aspects of it.  We’ll offer our expert opinion and guidance to help you make the right decision for you.

6. Due Diligence

The due diligence period takes place after you have accepted an offer from the buyer. The buyer then uses this time prior to the official closing to perform their due diligence. Typically this involves getting detailed financial and bank statements, copies of any contracts you may have with your suppliers or customers, copies of any leases, etc.  The length of this period and level of detail can vary greatly, and is generally dictated by the buyer.  In our experience, most of the time it runs between two and six weeks. 

The general objective of the due diligence period is essentially confirming that indeed the business was accurately represented to them prior to issuing their offer letter – that your revenue and profit are what you said they are, etc.  Most buyers are not looking for minor discrepancies, but rather only for “material” differences or “surprises” that were unknown to them.  During this period, our team will counsel you and assist where ever possible. 

7. Closing

When due diligence and buyer financing are complete, it’s time to draft the closing documents and complete the sale.  We can recommend legal and financial counsel  to help you with the various contracts and legal documents and to ensure you minimize the tax impact of the sale.  Finally, we’ll ensure that you collect your funds and have all of the documentation you need when you leave the closing table.  In general, the total length of time from offer acceptance to closing (when funds are received) is typically in the range of 60-75 days, but can vary shorter or longer in some cases. This includes the due diligence phase, pre-closing (drafting the sale contracts) and the closing itself.