BUSINESS BROKER SERVICES

If you are ready to seriously consider selling your business, please contact me (734-474-1161, or at steve@praxisbb.com) to discuss the parameters of selling your business. I would be happy to have an initial conversation and/or meeting to help you decide if you’d like to explore the possible sale of your business. All conversations and meetings are no charge, no obligation, and are completely confidential. During our consultation, I will be able to begin the process of educating you so you can better understand the complexities of business transactions.

Once you have made the commitment to move forward, the next step is to develop a market opinion of the value of your business (a valuation). I use proprietary software, combined with financial information and both hard and soft data provided by you, to place a market value on your business that will clearly demonstrate what you might expect in terms of proceeds from the sales transaction. The market opinion, like all interactions we will have, is provided without charge, obligation, and in complete confidence. I always validate the market valuation with at least one bank, as almost all business sales include bank financing. If the projected selling price to too high, banks will not provide loans to fund the deal. I work closely with them to determine the highest “bankable” price so that you can be confident the asking price is a realistic expectation of the proceeds from the sale. I will of course offer my recommendations as well, based on my many years of experience with scores of successful transactions on how to best structure the terms of the deal to achieve your goals while maximizing buyer interest in your business.

Once the listing price of your business is established, a straight forward engagement letter (i.e. listing agreement) is executed. This letter specifies the success fee (commission) that is paid at closing. I receive no payments unless there is a successful closing.

After the execution of the listing agreement, I’ll develop a confidential business profile used to kick-off the marketing of your business. This discrete profile of your business is sent to you for approval, and then posted on business-for-sale websites, which result in thousands of prospective buyers having the opportunity to see the profile. From that large pool, a much smaller number of active prospective buyers reach out to me to discuss their interest in your business. In addition, I contact my many years worth of connections and known prospective buyers to discuss their interest in your business.

There are many aspects to the selling of your business, but none are more important than conducting every step with total confidentiality. I understand that it is crucial that your employees, customers, vendors, competitors, lenders, and even your neighbors remain unaware that your business is for sale. As prospective buyers express an initial interest, they are required to submit a strongly worded confidentiality agreement (non-disclosure agreement) to make sure that you and your business are adequately protected. In addition, a buyer profile is required so we understand if prospects are financially qualified and possess the appropriate skill set to buy and manage your business. Buyers who complete these two steps are then provided with a detailed financial package and other information covering a host of topics surrounding all aspects of your business.

Buyers that remain interested at this point will have additional questions, which start a dialog between them and myself. As the information flow continues, the next step would be for a direct buyer-seller-broker meeting. These meetings can take place at your business or a neutral site, during normal business hours, evenings, or weekends. It’s your call. The buyer-seller meeting can lead to follow-up questions, further dialog, and the building of a comfortable relationship between the prospective buyer and the seller.

While I always represent you, the business seller, I also never work against the buyer. A successful outcome of my assignment occurs when bother the seller and the buyer are committed to the transaction which will result in a win-win sale. At an appropriate time, I will provide a letter of intent (LOI) template for the buyer to tender a purchase offer. Once the offer is received, I work with the buyer to clarify language and finalize price and deal structure.

When the LOI is in acceptable form to both buyer and seller, the document is executed and kicks off the buyer going down three parallel paths toward closing. These are due diligence, banking, and legal documents. If the buyer would like, I will introduce them to CPAs, attorneys, bankers, retirement rollover specialists, equipment appraisers, environmental specialists, etc. I draw from a number of trusted professionals with whom I’ve worked in prior business transactions.

At your election, I will introduce sell-side professionals to you as needed to help with the transaction. It is important you use an attorney that has a great deal of experience with business purchase transactions. Using your family or even business attorney that hasn’t handled several business sales can be a critical mistake.

Bank financing and due diligence require a great deal of information from both buyer and seller. An important part of my responsibility is to facilitate this process. A key milestone on the path to closing is the buyer receiving a bank loan commitment letter. At that point, the attorneys, if they have already not done so, should commence preparation of the legal documents. In most cases, the buyer’s attorney will draft the purchase agreement and ancillary documents. The seller's attorney may draft some documents as well. Ideally, the two attorneys, yours and the buyer’s, cooperate on these documents. However, it is important for you to read these documents and ask questions to your attorney in order to understand their practical effect.