The Good Method™ ( 7-STEP PROCESS OF SELLING A BUSINESS)
Good Merger's process of selling a business has evolved over the years into what it is today: a streamlined system that helps business owners successfully complete the sale of their business and earn top dollar in the process.
Our brokers have a collective of 88 years of experience in selling 700+ businesses, and we can put that experience to work for you. After considering your business exit plan, review our 7-step process of selling a business:
1. Introduction And Valuation
2. Packaging And Marketing The Business (Confidentially):
Once you’ve engaged with Good Merger, we’ll get to work packaging the business for sale, gathering all necessary info into a 2-3 page “summary profile” that provides pertinent details on the business’ greatest differentiators and assets – without disclosing any sensitive details or names. We’ll use that summary profile and other materials to market your business to our own network of thousands of prospective buyers, as well as marketing your business via the internet, strategic direct mail pieces, newsletters and more. When we do this, we go to great lengths to keep the identity of your business confidential – using generic phrases to describe your business rather than its actual name.
3. Buyer Pre-Screening:
Once inquiries begin arriving in response to our marketing efforts, we’ll begin the process of pre-screening buyers to ensure they’re serious and financially capable of purchasing your business. We protect your confidentiality by insisting prospective buyers sign Non-Disclosure (NDA) or confidentiality agreements, then meet with them face-to-face (if local) to educate them on the buying process. We’ll also present them to you for your approval before we release any sensitive information such as your business’ name to them.
During a no-cost, no-obligation introductory consultation, we’ll talk with you to learn more about your business and its unique attributes. We tell you about what we do, how we do it, what it costs, and what you can expect in the process of selling a business—and of course, everything we discuss is completely confidential. Afterward, we’ll perform a complimentary valuation, showing your business’ range of value and will do pre-screening with a lender to ensure it meets current lending guidelines.
4. Buyer/Seller Meeting
The next step is typically a meeting with the prospective buyer, you (the seller) and your Viking intermediary. This is a great chance for you to get to know the prospective buyer, to explain your business, and for the buyer to ask any questions they may have. The discussion is typically kept “high level” and related to strategy, company history, nature of the business, etc. The review of smaller details and fact-checking are typically handled post-offer during the due diligence phase.
In some cases a prospective buyer may also wish to visit your office and/or see any equipment, facilities, etc. We can also assist you with this and typically will schedule this sort of visit “after hours”. Many buyers also wish to perform a more detailed review of the business’ financials after the meeting. This is done only while in Good Merger’s office, as we do not allow prospective buyers to have copies of financials prior to an offer, in order to protect your privacy and ensure the highest level of confidentiality.
5. “Offer For Purchase” Review & Negotiation
When a prospective buyer decides they want to buy your business, the formalization of that is typical 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 And Ongoing Marketing:
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 are 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. The length of the due diligence phase varies but is generally between two and six weeks for most business transactions.
While most deals that get to due diligence proceed through to closing, we do also realize that your business isn’t sold until the sale is officially closed. Even as the prospective buyer is performing their due diligence, we continue to collect new inquiries in order to keep the sales pipeline open. Our team helps guide you through all aspects of the due diligence and pre-closing process.
7. Closing:
When due diligence and buyer financing are complete, it’s time to draft the closing documents and complete the sale. Good Merger sticks with you during every step in the process—we don’t disappear at closing but are with you side-by-side in case any last-minute questions or concerns arise. We can recommend legal counsel (attorneys) and financial counsel (accountants) as well 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.
Good Merger has successfully sold more than 700+ businesses since 1996; in fact, our closing rates are 4 times the industry average. Contact us today to learn more about how Good Merger’s process of selling a business can help you get what you deserve from your business.
