How To Sell Your Business: VR 20 Step Sales Process
A frequent question from business owners is, “How do I sell my business?” The “VR 20 Step Sales Process” is the organizational foundation that has been proven across five decades. There are no short cuts, our client’s needs are always put first, and it’s the reason why, “VR Has Sold More Businesses In The World Than Anyone®”.
VR 20 Step Transaction Process
1. Initial Meeting
An introduction to VR and a discussion on how VR can help unlock the value of your business. During this meeting your VR intermediary will ask to review your business tax returns, company financial records, marketing and sales materials, and any other pertinent information so they can understand your business. Together you will decide to move forward.
2. Recast Financial Statements & Market Value Analysis
Your VR intermediary recasts or normalizes your financial statements to reflect non-reoccurring expenses and prepares a market value analysis. If the decision has been made to obtain a third party business valuation, you VR intermediary will prepare the business outline and coordinate with the Valuation Analyst. Remember the goal is to unlock the value you have created while operating your business.
VR will present and explain the recast financial statements and the market value analysis. Your commitment to us is to sell your business at a price and with terms consistent with the marketplace. Your VR intermediary will prepare the Engagement Agreement for your execution.
You provide your VR intermediary with the necessary documents and data required to sell your business. Details are not released to prospective buyers without the execution of a Non-Disclosure Agreement (“NDA”) to protect the confidentiality of your company. VR will prepare a VR Business Profile based on the data and financial information you have provided.
5. Advertising & Marketing
VR takes control of the advertising and marketing for the sale of your business, which results in the highest possible response and the greatest number of prospects. In addition to the VR corporate website, vrbb.com and the VR local office website, a website specific for your business is created that still protects your confidentiality. Through VR, your business is also advertised on numerous other “business for sale” websites; local, regional and national publications; and specific matching takes place through the VR Buyer Tracking Database. VR also publishes “Today’s Business Owner” electronic magazine which is distributed monthly to buyers and sellers of businesses. Each subscriber has a direct link to access the public view version of the entire VR database of businesses for sale. For over 20 years, “Today’s Business Owner” has been a proprietary tool to help sell our clients business.
6. Buyer Qualification
Valued Representation of your business equates to increased qualified buyers, therefore eliminating those who are unable or not ready to acquire the company. All prospective buyers must sign a Non-Disclosure Agreement, complete the VR Buyer Profile, and demonstrate financial capability prior to receiving detailed information regarding the business.
7. Business Presentation
The VR intermediary presents your business to qualified potential buyers who receive a copy of the VR Business Profile. During the presentation and meeting, the various components and benefits of the business are discussed.
8. Buyer & Seller Meeting
A possible meeting between yourself, the potential purchaser, and the VR intermediary is organized to discuss the buyer’s serious interest and give you, the seller the opportunity to learn more about those interested in buying your business.
9. Offer to Purchase
Your VR intermediary encourages the buyer to write a fair and equitable “Offer to Purchase”, accompanied with an earnest money deposit.
10. Present Offer
Presenting the “Offer to Purchase” includes an explanation of the terms and conditions, background information on the buyer, discussion of the contingencies and an understanding of the underlying reasons behind the offer.
11. Offer Acceptance or Counter Offer
You may accept the offer as it is written, or with the help and experience of your VR intermediary, create a Counter Offer, or possibly reject the offer entirely. If necessary, the facilitation of negotiations of the counter proposals could take place.
12. Mutual Acceptance
When all parties agree to the terms and conditions of the sale, and sign all counter offers and amendments, the offer becomes a contingent Purchase Agreement.
13. Assist with Financing
VR has numerous financial resources including lenders who specialize in business loans. With our assistance you and the buyer can determine which methods of financing will work best for all parties and lead to a successful transaction.
14. Due Diligence
Nearly all offers are contingent upon the buyer’s inspections and approval of all aspects of the business operation including financial records. The coordination of the due diligence process is a crucial step in a successful sale as it verifies to the buyer that they are indeed acquiring what they believe has been offered for sale.
15. Contingency Removal
The buyer removes the contingencies for the agreement to become a “Binding Offer for Purchase and Sale”. At this time we are ready to open escrow.
Your VR intermediary will send the Purchase Agreement and other documents to the escrow representative who then drafts the escrow documents. Escrow is open as soon as both buyer and seller have signed the escrow documents. Depending on where you live or are acquiring the business, this process may be the responsibility of other parties. Your local VR intermediary can discuss with you what to expect in your market.
17. Lease Assignment
We work to present the buyer’s experience and financial qualifications to the property owner / landlord in order to obtain a lease assignment or a new lease satisfactory to the buyer.
18. Note and Lien, Search, Clearance or Assumption
If there are existing loans, liens or equipment leases that the buyer is to assume, VR can work with the lender, leasing company, legal or escrow representatives to transfer those obligations. All liens must either be cleared (closed) or transferred to the buyer, if part of the contract.
Arrangements are made for you and the buyer to count and price the inventory if it applies to the business that is being sold. If it is a large or complex inventory, it may be necessary to outsource this function to an inventory service.
The signing of the final closing documents may be done in person or, in many cases, done via courier, e-mail or fax. The business is transferred, funds are distributed and VR has facilitated another successful business transaction.
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