The process of selling your business may vary depending upon several factors the most important of which are your own needs and expectations. However, the usual sale process for a typical client involves the following 6 step process:.
1. Understand Your Business - We will have one or more meetings with you and other employees you want to be involved in the process. We have a proprietary checklist and Questionaire designed to provide us a thorough understanding of your business and its unique attributes. We also have access to proprietary industry analyses to provide knowledge of your industry and competitive landscape. At the end of this process we will understand and share your enthusiasm for your business so that we can convey that to Prospective Buyers.
2. Prepare the Confidential Offering Memorandum (CIM) – The CIM contains all of the information a prospective buyer needs to understand and assess the business and decide whether he wants to move to the next step which is usually a teelephone or face-to face meeting. In order to receive the CIM, the Buyer prospect has been pre-qualified financially and has executed our stringent confidentiality agreement which protects you from any disclosure or misuse of the information.
But the CIM does much more. It presents your business in the best possible light and makes a compelling case for acquisition while anticipating and addressing any problem areas or other concerns a buyer might have.
We also prepare a teaser. A teaser is a single page description of your company without any identifying characteristics or specifics. When the teaser and CIM are complete and approved by you for use, we proceed to market the Company
3. Contact prospective Buyers
Most Business Brokers and M & A firms write a short description of the business, post it on a variety of websites and sit back and wait for the phone to ring. In fact, they generally fill their portfolio with so many small, nondescript businesses that they can do little else. Their business is a numbers game and they can’t spend the time and resources it takes to properly package and market a real business.
VR First Coast conducts a much more proactive approach. Firstly , our marketing is based upon an in-depth knowledge of your business and its industry and utilizes our superior comprehensive Confidential Information Memorandum and package. With a great story to tell, we don’t sit back and wait-we take it to the marketplace.
VR First Coast has access to proprietary databases of thousands companies engaged in your business and private equity groups targeting businesses like yours for acquisition. We carefully cull those databases to find those strategic acquirers and private equity groups most likely to be interested in acquiring your business. We will develop a list of such companies for your review and approval. Then we will mail a cover letter and the teaser memorandum to these prospects. After interested prospects have responded , been financially qualified , and executed the Confidentiality Agreement, we will e-mail them the Confidential Information Memorandum. We will soon thereafter follow up with them via e-mail or telephone, answer preliminary questions and determine their interest and the next steps. Often, a conference call is scheduled with you followed by a face-to face meeting at your location or our offices.
Our web-based marketing program is also kicked off simultaneously . Excerpts from the teaser Memorandum and/or CIM are used in our website listings and are designed to pique interest and generate inquiries while maintaining the complete confidentiality of the client. We have our own proprietary website at vrfirstcoast.com and also the VR corporate website which reaches more than 70 VR offices internationally. VR has an active network of offices, formal and informal , and we get many referrals and buyers from our other offices.
VR First Coast is also a member of Business Brokers of Florida which is the states leading organization of co-operating Business Brokers and which has its own proprietary multiple listing service for businesses which we participate in. We also syndicate our business listings to the approximately 20 other leading business for sale websites including Bizbuysell, Bizquest and Mergers.com. One of the keys to selling your business is maximum confidential exposure and no one does this better than VR.
4. Controlled Auction The Best way to sell a Business for the maximum price and best terms is a controlled auction.
We identify multiple buyers and get them to compete for your business. We invite qualified buyers to make proposals in the form of a letter of intent. We then evaluate and discuss each letter of intent with you to decide which are most appealing and we then begin negotiations with multiple buyers. Usually, the letters of intent are non-binding but contain price , terms and other key components of the offer such as employment or non-compete terms for the owner/seller, due diligence period and requirements, standstill period and terms , and other important provisions. Once the Letter of intent is agreed upon and signed, our work is about half finished.
5. Definitive Agreement and Due Diligence
The Letter of intent sets forth the major terms and deal structure but a definitive purchase/sale Agreement is still necessary. Various other agreements such as employment contracts and non-compete agreements may also need to be negotiated. We work closely with you and your counsel to provide expertise and help with these. We also interface with the buyer to expedite and smooth the Due diligence process with minimal disruption to you and the company. During this period , it is crucial that the business stay on track and management needs to focus on running the business. Despite everyone’s best efforts , it’s a rare deal that doesn’t encounter obstacles and a few unexpected bumps in the road. We often spend considerable time and effort dealing with obstacles and putting out small fires before they spread and imperil the deal.
6. Closing By the time closing occurs, our work is nearly done. However, we remain at your side to deal with any last minute issues that arise.
Post closing, host a celebratory dinner and provide deal momentos for the key participants.