Conduct Business for Sale - Scott Geller

Scott Geller of Capitis Advisors, LLC - “The CFO Perspective”

Retained Earnings Reinvestment

INTRODUCTION
I have 20 years of experience in the finance realm that started with the Federal Reserve Bank as a bank examiner, moved on to 7 years at a Fortune 300 insurance company, and then a 60 person spin-off technology firm under the Allianz umbrella of companies. I was with the spin-off from day zero all the way until the unfortunate end when I had to close down the business.

​I am now a financial consultant serving primarily as a fractional or part time CFO for companies that range from start ups to young and scaling to established with stable growth. I take over from the accountant as a lean cost effective option for Profits Engineering, Cash Optimization, Strategic Acceleration and Executive Partnering committed to your success. Please contact me at scott.geller@capitisadvisors.com.

PROBLEM STATEMENT/SHOW OBJECTIVE
As a business owner or leader, you've created a successful company despite all the factors pushing against you and have decided it might be time to sell the business. The process can be difficult, confusing, and frustrating. Ideally, you've taken the steps we covered through the previous 10 shows to set you up for this pivotal point in your business's life cycle.  You have a range of factors to consider from industry size of  your company, market conditions and even who you are targeting as your best buyer. However, preparation and assistance can be tremendous in landing a successful sale. 


WHAT YOU NEED TO KNOW

1. Calculate and know your business profitability
   1. Determining the accuracy of your numbers
   2. Compilation
   3. Review
   4. Identifying the key value drivers, major strengths, and major weaknesses
   5. Audit
2. Getting Started
   1. The Non-Disclosure Agreement.  Owners are often uncomfortable with the information requests
   2. The information Checklist
   3. The interviews and support roles from accountants, CFO, business brokers, etc
3. Selling a business is time-consuming and for many, an emotional venture. 

WHAT YOU NEED TO DO
Valuation

1. Who should conduct the valuation?
   1. The self valuation - I've invested a lot of money in my business, but the value of any business asset, tangible or intangible, is its ability to generate income.
   2. CFO
   3. Business Broker
2. Determining a reasonable selling price.
3. Two reasons.
   1. First, most local tax accountants are not qualified to do business valuation.
   2. Second "independent third-party appraisal."
4. One of the first questions buyers ask is "How did you come up with the price?"
5. The valuation types - Rigorous asset-based, income-based, and market-based valuation methods
6. Fully understanding the value of the business will give you an advantage during negotiations.

Other Needs

1. Strategic planning to develop a business transition plan
2. Due Diligence and Business Checklist
   1. Company documents
   2. Vehicle, equipment, or other assets
   3. Employees
   4. Competitors
   5. Customers
   6. Key and secondary vendors
   7. Financials
   8. Other
3. Identify potential buyers through relationships, marketing, national databases of qualified buyers
4. Offering memorandum
5. Presentation of the business
6. Negotiation of the transaction
7. Deal structuring
   1. Credit needs of the buyers
   2. Payment plans - down payments; earn-out; straight purchase
   3. Seller's continued role
8. A thorough, professionally prepared business valuation and advisor will assist you.

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