S7 W5 E17-20 Controlling the Sales Process of Your Business on The Entrepreneur’s Edge with Bill Kelly

6/12/2021

The Entrepreneur’s Edge with Bill Kelly

Expert Advice on Buying and Selling a Business
on the IBGR. Network ...The World of Business at Your Fingertips

Week 5, Episodes 17-20, Controlling the Sales Process of Your Business

Welcome to week 5 of the Entrepreneur’s Edge with Bill Kelly

Quote of the Week: “All deals require a level of information to be shared between the parties involved. However, it is wise to require the commitment, on both sides, to be commiserate with the value of the information before it is shared.” – Jack Welsh former CEO of General Electric.

Week in Review: My team listed over 5 million in new listings in November and received three offers to purchase for our clients in November. The level of business for sale listings and buying activity remain strong. 2021 will turn out to be our best year ever!

If you, or someone you know, is interested in selling a business or buying a business, please contact me at Transworld Business Advisors of Richmond. Transworld is the largest seller of small businesses in the US with over 300 offices in 21 countries, and we have the experience and resources to professionally manage your transaction.

We also help clients sell and buy franchises. We offer a free initial consultation to provide you with the details of any franchise transaction.

If you of someone you know has a successful business and are considering expansion through franchising, please contact me for more information. We are franchise experts and can guide you through the process of building your franchise documentation, applying for your licenses, and managing the sales process of your new franchise offering.

Bill Kelly, Transworld Business Advisors of Richmond, VA ● 804-510-0670 ● bkelly@tworld.com

Episode 17 Controlling the Sales Process
Setting realistic expectations for Buyers seeking information about a business is critical.

Buyers want information fast. They want all the financial details first and worry about the operations later. Controlling the dissemination of information and parsing it out in an orderly way, is more beneficial to the Buyer. The process to obtain information about a business should always require adequate information and growing commitment from the Buyer.
Buyers should always sign a non-disclosure agreement and provide some basic qualifying information for the Seller to review before the business information is shared. Sometimes, the Seller will want to approve the Buyer’s information before sharing an executive summary.
Review of Transworld NDA and Buyer Profile.
Drive by inspections must be pre-arranged by your Broker. Contact with the Seller or employees at this stage is never allowed. First contact with a Buyer should always be facilitated by your Broker via an internet video meeting or conference call.

Tags: Selling a Business, Business Brokers, Controlling the Deal, Document Management, Buyer Profile, Transworld Business Advisors

EPISODE 18 Negotiating with Potential Buyers
Rely on your Broker to relay information between you and the Buyer.

The purpose of negotiating with a Buyer is to receive an acceptable offer. Once NDA’s are signed, and the Buyer information approved, the Executive Summary should provide all of the information the Buyer needs to get a good understanding of the business.
Business Tax returns, and other sensitive information will always be requested, but often it’s a good idea to hold some information back until and offer has been made and accepted. Carefully guarding customer lists, vendor lists, and other trade secrets is very important.
Buyer’s looking for cash flow only will generally make offers based on the Seller’s income from the business. But Strategic Buyers often consider many other factors. Try to identify what type of Buyer you are negotiating with.
As the Sargent on the TV show Dragnet use to say, “Just the facts Mam”. Try not to get involved in social, political, or other controversial discussions with Buyers. Always ask your Broker to moderate talks with potential Buyers so they stay on topic.

Tags: Negotiating, Selling a Business, Business Brokers, Talking with Buyers, Dealing with Buyers, Buying a Business, Transworld Business Advisors

Episode 19 Receiving Offers and Making Counter Offers
Understanding the different kinds of offers and what is included.

There are four different ways a Buyer might make an offer to buy your business including a Verbal Offer, Informal Written Offer (Usually via email), Letter of Intent (LOI), and Written Formal Offer.
Offers and counteroffers should always go through your Broker. If a Buyer contacts you directly, refer him back to your Broker. Your Broker make sure the offers are legitimate and the terms they are asking for are clear.
An offer to buy a business usually includes the Buyer providing some amount of “good faith” or “earnest” money. Not all Buyers will want to do this. Ernest money is always held in Escrow usually by an attorney and the funds can be refunded to the Buyer or not, depending upon the terms of the offer.
Once an offer is accepted, the final buy/sell agreement is usually drafted by either the Seller’s or Buyer’s attorney. More complicated the sales can require very complicated legal agreements. For smaller sales, Brokers can usually recommend an Intermediate Attorney who can represent both parties in the transaction keeping closing costs low. We always recommend you have your personal attorney review all documents before closing.
Buyers and Sellers should also consult a professional Financial Advisor to understand the tax implications of selling and buying a business. As the old saying goes “ an ounce of prevention is worth a pound of cure”.

Tags: Selling a Business, Business Brokers, offers to sell, offers to buy, Closing Attorney, Intermediary Attorney, Financial Advisor, Transworld Business Advisors

Episode 20 What is Due Diligence and why is it Important?

How long does Due Diligence take, and how much information do I have to share with the Buyer?

Due diligence is an investigation of a business conducted by a prospective Purchaser before they purchase. The purpose of this investigation is to prove to the Buyer the validity of the information offered by the Seller.
Typically, for businesses selling for under five million, the due diligence period lasts for 10 to 90 days, depending on the sophistication of the Buyer and complexity of the deal. With more complicated deals, it could last six to nine months.
Buyers will typically want to inspect as much of the business as possible. Sellers must supply items such as: business licenses and permits, corporation paperwork, leases, contracts with customers and vendors, a range of business financials & tax returns, employee / payroll records, bank statements, business vehicle records, and more.
During the Due Diligence Period in most offer and acceptance agreements, the Buyer has the right to amend or withdraw their offer.
Talk to your Broker in advance and plan for the Buyer’s Due Diligence Inspection of your business. Presenting the Buyer with provable information and conservative financials initially will ensure the Due Diligence Inspection will go much easier.

Tags: Selling a Business, Business Brokers, Due Diligence, Business Inspection, Financial Inspection, Business Sales, Buying a Business, Transworld Business Advisors

Short Bio: Bill Kelly is a Senior Business Broker and Franchise Consultant for Transworld Business Advisors of Richmond, VA. He is also a Licensed Virginia Commercial Real Estate Agent. Bill has been a lifelong Entrepreneur and has personally started or purchased and then sold eleven businesses. He lives in Richmond, Virginia, with his wife Rebecca, and has two daughters, and one granddaughter.

Contact links: bkelly@tworld.com

Social Media:    Facebook: https://www.facebook.com/BillKelly1955
       LinkedIn: https://www.linkedin.com/in/billkellyprofile/
Website:    https://www.tworld.com/agent/billkelly/

LISTEN LIVE: IBGR.Network

0 Comments