What if I want to sell my business? - Scott Geller

Scott Geller – The CFO Perspective

Episode: What if I want to sell my business? 

Date: March 22, 2021

IBGR.Network - PROFIT Radio. Everything a business owner needs to start, grow or exit a business. GROW WITH US.

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 50-70 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 and 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, 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 11 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 are tremendously valuable in landing a buyer and completing 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. Types of transfers for ownership upon exit
   
   1. Stock Sale
      
   2. Asset Sale
      
   3. Family Transfer
      
   4. Combination
      
   5. Tax considerations
      
4. Selling a business is time-consuming and for many, an emotional venture.
   

WHAT YOU NEED TO DO
How to prepare for funding

1. When - before you need it
   
2. How much?
   
   1. NOT As much as possible vs What you Need
      
   2. What you need?
      
   3. Why you need it?
      
   4. Reserve
      
3. Due Diligence
   
   1. Search for term sheets
      
   2. ownership
      
   3. Financials
      
   4. Clients
      
   5. Business Plan
      
   6. Org Chart
      
   7. Organizational Agreement
      
   8. By-laws
      
   9. Description of business
      
4. Process
   
   1. Organize
      
   2. Use your network
      
   3. Knowing your business' strengths and weaknesses - be honest with yourself
      
   4. Reach out to parties with the correct intent and purpose - don't carpet-bomb
      
   5. Realize there are good and bad characters in this effort
      
5. Understand what you want but also what the buyer wants ... comes down to negotiations
   
6. Deal structuring
   
   1. Credit needs of the buyers
      
   2. Payment plans - down payments; earn-out; straight purchase
      
   3. Seller's continued role
      
7. Key Takeaways
   
   1. Be careful of "Google Consulting"
      
   2. Talk to your family and don't assume they want to take ownership
      
   3. Talk to competitors
      
   4. Biggest mistake is not starting process soon enough
      
   5. Making assumptions without leveraging or bringing in resources
      
   6. Get comfortable with your potential buyer - seen deals fall apart b/c couldn't get comfortable especially with competitors
      
   7. Keep private but involve accountant, finance, executives, and outside advisors remotely
      
   8. Trusted Advisors and or Mentors bring experience, perspective, independence, and guidance
      

PREVIOUS : Episode 11 - 2021_03_15 - How and where do I access funding?
NEXT: Episode 12 - 2021_03_29 - Summary of What We Achieved 


Resources:
You can connect with Scott via his website or LinkedIn
Connect on LinkedIn
See Scott’s Website

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