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Selling a Business: The Listing Process
Apr 2014

Selling a Business: The Listing Process

By webmaster

Selling a Business seems like a complex problem but in reality it is not.

The first step is to decide on how you want to market the Business. Do you want to handle every inquiry from every Buyer? Do want to have to answer all their questions? Do you want them calling you and disrupting Business?

Of course not.

For this reason, we recommend finding a Business Brokerage Firm.


Picking a Brokerage Firm

Important factors to consider when picking a firm are: geographic area they cover, industries they are familiar with, and whether or not they co-broke. I will touch on these briefly. Obviously you don’t want to use a Wisconsin Firm when selling a North Carolina Business so make sure the Firm you choose is in your area. The second is make sure they know something of the Industry. You don’t want to sell an advertising company with a company who knows nothing about advertising and how the industry works. Many firms advise against using a broker with no experience representing your Business and while this makes sense it is not entirely accurate. Brokers are trained with Business Knowledge and should be able to adapt to a variety of Industries even if they haven’t dealt with a particular industry before. 

So then what are we trying to say you may ask? You should choose an adaptable broker who is familiar with a certain industry. If they don’t know manufacturing and you’re a manufacturer it might not be a good fit. But just because they know coffee and you are a Machine Shop isn’t reason to find another Broker. The basics of manufacturing are the same and as long as the Broker can adapt to represent your Business.

Co-broking is important because it opens up your potential Buyer pool as these brokers are willing to work with other Brokers. Sadly, many Brokers do not do this and have surely lost Buyers doing so since these Buyers were represented by other Brokers.


Preliminary Interview

We usually conduct a preliminary interview via phone where we learn about your Business. During this phone call we ask general questions about the Business such as the type of Corporation? Who are your customers? Revenue? Why do you want to sell? And finally what do you want for the Business?

We also tell you about us. How we are transaction brokers who work for the deal not one person over another. How we believe strongly in Confidentiality and that we do not reveal who you are or where you are to prospective Buyers without your permission, preferably at a meeting between Buyer & Seller.

After this call we begin our research into your industry and Business. At this point we request your Profit & Loss statements from which we  can derive a likely value for the Business. This process takes a few days as we compare you to other Companies in your Industry and discover your competitors. We determine the likely value your Business should sell for and then we are ready to meet with you, usually within a few days.



At this meeting we get a chance to see the Business and talk about the likely value of the Business. This part is about you as Owners of the Company and for us to address any questions and concerns you have about listing and the selling process.



In the following week, we put together two main documents on the Business. The first is our Business Listing Information Sheet (BLIS) which is a one page prospectus of the Business. This document shows the last three years of financials, a description of the Business, and the value of its assets, among other things. The second document is the Confidential Memorandum. This is a 15-25 page description of your Business that provides a Buyer with all the information they should need -other than who you are- to determine whether or no they want to meet with you, ask questions, and pursue an offer.

Once these documents are completed we list your Business for sale on 9-12 websites, with the number being dependent on size and industry. From there we field the inquiries and only notify you of the Buyers who, after viewing the BLIS and CM, have either some questions to ask or want to meet you and hopefully make an Offer!


Congratulations! Your Business is Listed!

Tune in next time for information on the Negotiation & Due Diligence process. 


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