Achieving The Best Possible Transaction involves the following steps:
Valuation — Not knowing this makes good decision making virtually impossible.
Confidentiality — Once you decide to move forward 100% confidentiality is mandatory.
Recasting — Most businesses pay some ‘owner’s expenses’ and thus statements have to be ‘recast’.
Get 3 Lender Commitments — Get business ‘qualified’ for future to be identified ‘qualified buyers’.
Tax Strategy — Understand your best tax structure for the transaction and proceed accordingly.
Packaging — Create a Confidential Business Review (CBR) – a 20+ page that ‘tells and sells the story’.
Pricing — In the CBR and your marketing — do not state an ‘asking price’ or you create a ‘ceiling’.
Marketing Strategy — Different strategies for different types of businesses — all with the objective of identifying the categories and the specific buyers who are most likely to pay the highest price.
Confidentiality — Marketing done confidentially; everyone signs a strong Confidentiality Agreement.
Qualifying Buyers — Screen for financial capacity, business experience, credit score, etc.
Answering questions — Be highly responsive in providing both answers and additional data.
Meetings — If buyers out-of-state or international first meeting likely either Skype or a conference call. If local/regional likely a neutral site or the business after hours when no employees are present.
Letters of Intent (LOI) – Interested buyers get LOI draft that states key essentials + leaves some blanks.
Calling for Offers — Stipulate a date and time by which interested parties must submit offers.
Coordination — 5 offers over 6 months is nowhere as effective as 4 or 5 offers in the same time frame.
Lender Screening — Lenders give a verbal indication as to their probable approval of given buyers.
Offer Analysis — Self explanatory but far too broad a topic to address in this format.
Counter Offer — Again self explanatory but there are some key strategies to observe.
Signed LOI — will have contingencies such as due diligence, lender approval, lease, etc.
Due Diligence – Complete due diligence is 1 of 5 major keys to a strong litigation defense strategy.
Legal Documents – Key is understandable legal documents on a cost effective, non-combative basis.
Clearing the Contingencies — Things happen best with agreed upon deadlines.
Opening Escrow — $$, lender instructions, documents and escrow merge to close the transaction.
Transaction Closed — Post closing agreements of non-compete, training, transition, consulting in place.