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Factors to Consider When Selling a Company

Most business owners have never sold a company, so they do not understand the process and how to properly prepare their company for sale.  Neglect this foundational step at your own peril! This transaction could be your only chance to reap maximum rewards for the company into which you poured so much of your hard work and sweat equity. 

Some entrepreneurs want to sell too soon before their company is ready. This is not at all uncommon.  How do we know? Because we have a readiness evaluation system that we use to determine the sellability of businesses.  If a company has a low sellability score, does that mean it cannot be sold?  Not at all. It simply means there is some work to do if you want to reach your maximum sales value.  

DBG Advisors works with clients every day to determine their sellability score and prepare a plan to get them on the path to acquisition. 

To sell your company, these are the important issues that you need to consider: 

  • Company health. How healthy is your company and how attractive will it look to a potential buyer?  DBG Advisors helps our clients look at their company from a buyer’s perspective, so they can understand what should be changed to yield the best sales price.
  • Business Valuation. What is your company worth?  DBG Advisors will use our expertise and vast resources to determine a Broker Opinion of Value. This is a defendable sales price that will stand up to scrutiny.
  • Offer Evaluation & Due Diligence. Evaluating the price and terms of an offer can be tricky when you are faced with complicated conditions. You may even have multiple offers. The DBG Advisors team can help you evaluate multiple offers. 
  • Due Diligence. A buyer will usually hire a CPA firm to do a quality of earnings report to verify the condition of the company.  This process must be managed to ensure it does not go off the rails. DBG Advisors can help with this process.
  • Negotiations. You are not selling a car. There will be multiple rounds of back and forth so be prepared for this complex process that will include multiple parties on both sides. DBG Advisors can manage negotiations and will make every effort to make the process as smooth as possible.
  • Contracts. The Asset or Stock Purchase Agreement should protect your interests protect your interests as the seller.  It is essential to have qualified representation to review all agreements.  Count on your DBG advisor to work with your attorney to shepherd you through this process, ensuring your interests are protected.