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These valid reasons, and other reasons for considering a sale, do not
imply failure or willingness by the owner to accept less than a fair price
for the business.
HOW MUCH IS THE BUSINESS WORTH
A business enterprise, like any asset, is worth what a buyer is willing
to pay.
Buyers ask countless questions, but they are primarily concerned with a fair
return on their total investment. In addition, prospective buyers make many
judgments about market position, proprietary know-how, competitive
strengths, quality of the assets, growth potential, and risks of the
business.
To accurately determine the true worth of a business, the company's
accounting reports, prepared primarily for tax purposes, must be restated to
reflect the true financial performance of the business.
The Telling Group helps the business owner determine the true value of the
business and, most importantly, can help prospective buyers understand the
reasons for such value, which allows a transaction to be structured for the
maximum benefit of buyer and seller.
IS CONFIDENTIALITY IMPORTANT?
Sound working relations with employees, customers, suppliers, and bankers
are important factors to a company. Any premature indication of a possible
change in ownership could disrupt these relations and weaken the company's
competitive position. For these reasons, and many others, confidentiality is
critically important at all stages. With the proper procedures, it is
possible to minimize the risk of an untimely disclosure.
In every transaction, there is an appropriate time to reveal that a sale may
be imminent. Proper timing of these sensitive announcements can contribute
to a smooth transaction and reinforce the buyer's willingness to proceed to
a closing.
The Telling Groups helps to ensure that information is kept confidential
throughout the entire selling process until it is appropriate to reveal that
a sale is forthcoming.
WHEN IS THE BEST TIME TO SELL?
Usually the best time to obtain the highest price occurs when sales and
earnings are good and trending upward. A solid earnings trend will enable a
buyer to pay a higher price and still meet his return of investment
criteria. A history of good performance also gives the buyer confidence in
projected future earnings.
However; market conditions for business sales also significantly affect the
salability of a business. Today's market is the best we have seen in the
last five years due to a large number of serious buyers in the market;
readily available bank financing; and the reduction in the capital gains tax
rate, which nets the owner more cash at closing.
WHO WOULD BUY IT?
For most companies, there are several categories of prospective buyers.
The most obvious are other companies in the same business for whom the
acquisition would be a logical expansion with potential economies of scale.
Consideration should also be given to suppliers and customers of the
business.
However, based on our experience in selling over a thousand businesses,
approximately 80% of the prospective buyers are individuals who want to
control their own future. Many of them will be moving into the area from
other states and countries.
The Telling Group is in continuous contact with all categories of buyers. We
utilize effective search procedures to find and screen those who are best
qualified to buy.
HOW CAN THE TELLING GROUP HELP?
The Telling Group can help by using their experience and know-how gained
from several hundred business sales. We guide the client through all of the
complex steps required to sell a business. The first step will be our review
of the company's history and the client's objectives to make sure that a
sale is the best course of action. This review includes an opinion of a
range of selling prices of the business in today's market.
If the client decides to proceed with the sale of the business, The Telling
Group then prepares custom-tailored presentation documents, develops buyer
prospect lists from its contact files and other resources, makes the proper
approaches, screens the buyer prospects, and introduces only serious,
qualified buyers to the client.
The Telling Group will handle the entire transaction from the initial
introduction of the buyer through closing, including coordination with
attorneys, accountants, landlords, leasing and utility companies, and title
companies.
An owner may ask: "Why can't I sell it myself?" There are several reasons
why most owners choose not to:
- An owner representing himself cannot maintain anonymity and the lost
confidentiality could seriously hurt the business.
- An owner may not be knowledgeable in current areas of law,
accounting, taxes, and marketing of businesses.
- An owner typically does not have the ability or time to contact,
screen and qualify a large group of prospects to find a qualified buyer
who is serious and will offer a fair price.
- An owner's talents are much more effectively utilized in running the
business than in trying to sell the company.
- An owner generally would not have the experience, knowledge, and
negotiating skills needed to sell his company efficiently and for the
best price, particularly in a highly emotional negotiation such as the
sale of a business where the buyer's objectives are totally opposite of
the owner's.
The Telling Group has a trained professional staff knowledgeable and
skilled in business transfers and they can make the sale of the business a
reasonably pleasant experience. Call us to find out how we can help.
Tax considerations Questions:
The Capital Gains Tax Rate is Going Back to 25% What
does this mean (to you)?
When the capital-gains rate increases 67% in January
2009 by going from 15% to25%, business owners will have to increase
their net profit 24% for two consecutive years just to net upon the
sale of their business, the same after tax profit they would receive
if they sold now at the 15% rate. What can you do about it?
Consider preparing your company for the market place now. It
generally takes a business approximately 12 months to prepare for
market, go to market, find the best buyer and close a transaction.
So you May want to consider selling now.
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