Thinking of Selling Your Company?
Here are the answers to the top five questions sellers ask me most.
In all cases, I could answer “It depends”. But, for the record, here are most likely answers.
How much will my company sell for?
If you have a company that is performing at or above industry norms, you can use a rule of thumb estimate for your value that would be between 3 and 5 times your EBITDA. (Earnings before Interest, Taxes, Depreciation, and Amortization), which approximates the cash flow of the business.
How long does it take?
It usually takes months to sell a business. The preparation takes one to two months, the marketing could take three to six months, the negotiation could take one month, the due diligence and the documents could take three to four months. Overall, that is eight to 13 months.
How much does it cost?
You will have attorney, accountant, tax, and advisor fees. These can range from 5-10 percent of the overall price.
What do I need to get started?
At least three years of financial statements and tax returns. (Income Statement, Balance Sheet) that foot to your tax returns. A summary of your business in terms of location, types of clients and related services/products, gross profit margins for each.
How do I keep this confidential?
Hire an advisor, meet offsite, and have meetings via Zoom from your home. Do not release your information to anyone who has not signed an NDA/Confidentiality Agreement.
I wish people would ask me:
What are some of the biggest mistakes you’ve seen people make as they go through this process?
Do you have questions you’d like to have the answers to? Have you been thinking of selling to an external buyer or if you aren’t sure what you’d really like to do but you want to start down the path of planning so you will be working towards those goals over the next year, let’s talk!
I can be reached via email: [email protected] or phone a: 224-688-8838.
We’re here to help you Harvest Your Potential!