Second in a Series about Business Valuation, Sales and Liquidity
By David Brown [email protected], (216) 200-7490
Red Hawk Associates, Ltd. – merchant bankers investing, alongside our partners, in lower middle market businesses
In my last note, I set the stage with this paragraph: “So, you’ve been working for 30 years to build your business. Now, it is time to liquidate those assets in the business (inventory, equipment and goodwill amongst others) and convert them to cash. And get on that next flight to Naples.”
Now, you have obtained a professional valuation of your business based on audited or, less satisfactorily, reviewed financial statements for the past 5 years and a business plan and financial projection. You and your tax advisor know, based on various valuation scenarios, how much you would realize from a sale. You have a team of advisors including your tax advisor, your accountant and your deal attorney. Next, you need to determine how to sell the business. It is simple; just find the best intermediary to sell it and move forward.
How do you know an intermediary firm is the best for your business sale? Ask these questions below, amongst others:
- What do you think is the current market value of the business?
- Do you know the industry and have you advised companies in it?
- How would you market the company?
- What is your timeline from start to close?
- What are your relevant references?
Once you have chosen the sale intermediary and added her firm to your team, the fun is just beginning. Stay tuned for the next edition.