Selling A Business

Selling Your Business Is A Life-Changing Decision, Don’t Go It Alone

If you have a business and want to sell it, then Carpenter Hawke has the experience, resources, and global reach to secure the right deal for you, at the right time. Selling a business the right way takes years of experience. We start by fully understanding your objective and goals and then we customize a process to find the optimal buyer and deliver the end result that our client desires. At the heart of our process is comprehensive preparation and buyer research from our support team along with a coordinated, aggressive and confidential marketing effort. This, combined with our partners over 50 years of extensive experience negotiating transactions on behalf of our sell-side clients, allows Carpenter Hawke to achieve above average results. The better we learn and understand your business and your objectives in a sale, the better we can serve you. We (Seller and Carpenter Hawke) become a team in the process. All Done Confidentially!!

There are many valid reasons for selling a business, including: Liquidity, Succession and Retirement, Estate Planning, Expansion or Synergistic. Carpenter Hawke & Company was founded in 1993 to provide private businesses/companies with a level of merger and acquisition expertise generally available only to larger companies. Our expertise is handling the specific issues associated with selling private, small to mid sized companies. We regularly advise sellers on the why, when and how of the selling privately owned business. We also are experts at business market value, which is usually one of the most important questions and concerns sellers have! What is my business worth!
A company’s value is determined by a variety of factors, including: a company’s past performance, its future earnings prospects, its industry outlook, and the strength of its management, products and services. In the end, value is determined in the marketplace. The best way to maximize value is to create an active market of interested acquirers, “One Buyer Is No Buyer” .

Our team would be glad to discuss (CONFIDENTIALLY) your objective, or to provide guidance on the range of market value for your business. Also please sign up for our free book entitled, “How To Sell Your Small to Mid – Size Business”, by our colleague, Ney Grant. We have experience to sell your business at the maximum possible price. Contact us today and sell your business according to your requirement.

 


 

Carpenter Hawke & Co. provides professional mergers, acquisitions, divestitures and valuation services to sellers of privately held small to mid-sized businesses, with revenues ranging from $1.5mm – $50mm. Selling a business is a complex process. Exit preparedness is very important. Meeting with the team at Carpenter Hawke & Co. early can help maximize value in the future. Selling your business can be a life – changing decision. CHCO has the experience, resources, and national and international reach to secure the right deal for you, at the best time. We become your trusted partner in the process, no matter your size or industry. At the core of our process is comprehensive preparation and deep buyer and industry research along with the most progressive marketing approaches in the industry. Our team’s experience and negotiating skills allow us to maximize value for our clients in a sale. “We Position Your Business For Sale To Achieve Maximum Value, All Done with the utmost of Confidentiality.” Personal integrity and professionalism govern our performance with consideration given to our clients best interests. become the most popular exit strategy for business owners. In some cases, there are no successors who want to continue the business; in others, it was always the business owner’s plan to convert the business into liquid assets at a certain point. Whatever the reason you want to sell yours, following these tips for selling a business will help ensure that you get the best price and that your business sells. You need Carpenter Hawke & Co. to get it done confidentially, and the right way in order to maximize value!

Sell at the right time for the right reasons.

The most common reason for selling a business is that a business owner falls ill or gets too old to continue to run it – the worst time to be selling a business. For one thing, it’s going to be extremely difficult for you to deal with the additional stress of selling a business in those circumstances; for another, the buyer will use your circumstances as leverage against you.

So don’t wait until then. The right time is when you’re still healthy and have a successful business to sell.

The best time to sell is also when the business is performing well. It is all about timing! Whatever your reason, stick to it and always be honest!

Be clear about what you’re selling.

Before selling a business, you need to consider what all the assets of a business are and decide what you are selling. Determine what physical assets you are selling and what other assets you have to sell. Selling a business often includes assets such as good will, trademarks or client lists as well as physical assets.
The value of these will depend on their quality.

If your business is incorporated, you also need to decide if you are going to sell your business as an asset sale (where you sell everything in the corporation but not the incorporated company itself) or a share sale (where you sell everything including your incorporated company).

Determine what your business is actually worth.

Truthfully,  your business is worth as much as it will fetch in the marketplace. But determining just what that price is the trick. There are several different business valuation methods ranging from asset-based to future earnings approaches. Of course, no one approach can be used in isolation; the current market, economic trends and what other similar businesses have sold for also need to be taken into account.

We can give you a good estimated value of your business, but at times and under certain circumstances, a professional business valuation should done. Our valuation team headed by Lou Pereira, have all the certifications to properly perform the business appraisal.

Make sure your house is in order.

When you’re selling your business, you need to be especially careful not to let things slide. In fact, this is the time that making the extra effort to keep things in tip-top shape can really pay off. Think again of selling a house; like a house that’s up for sale, you want your business to show well.

So whether you have any interest left in running the business, you need to make sure that you are keeping the business’s records up to date, the inventory up and the premises maintained. People want to buy thriving businesses, not a neglected ones.

You’ll also want to be sure that you’ve reduced your liabilities as much as possible, doing things such as settling any lawsuits and making sure all tax payments are up to date.

Get professional help when selling a business.

Selling a business is can be a very complex transaction, – and arguably, one that has even more emotional impact. Besides providing necessary expertise to guide you through the selling process, hiring professional help can help you maintain the emotional distance and objectivity you need to successfully sell your business.

Which professionals should you hire?

• As already mentioned, a professional business valuator can determine what your business is worth. His or her valuation will be much more credible to a potential buyer than yours. Carpenter Hawke can help!
• An investment banker or merger & acquisitions advisor can be a real boon in terms of finding and dealing with prospective buyers of your business and helping you navigate the sales process. Carpenter Hawke can help!
• A lawyer can draw up and/or review the documents necessary to sell your business, such as the purchase agreement, but Carpenter Hawke can point you in the right direction with an transaction attorney with experience.

 

One Last Tip for Selling a Business

Selling a business is serious business, so you want to make sure you take the time and trouble to do it right. Careful preparation and using the professional resources available are the keys to getting as good a price as possible when selling a business – and the keys to seeing your business realistically and setting a fair price for it. Carpenter Hawke & Co. partners have 60 years combined experience getting businesses sold for clients, at maximum value all done CONFIDENTIALLY!

 


Exit Plan

7 Essentials to Sell Your Company for Maximum Value

All too many small to mid – sized company owners sell their companies for far less than what they’d hoped for because they hadn’t prepared for the “exit day.” In our research and experience, we have found seven strategies to be essential for business owners who someday want to cash in on all the hard work and risks they took.

How does this happen? Mid-market business owners under invest in training themselves on how to prepare their firms for an exit. Firms like Carpenter Hawke & Co. can guide you through the process of getting your ducks in order and helping with the best timing for you, the seller, in a possible sale.

The majority of mid-market owners are inexperienced at selling a business, and preparing for a future sale – especially if it is many years away — rarely feels urgent. Other priorities jump ahead, and owners don’t build skill or knowledge on how to exit until the event is upon them. This dramatically increases the risk of having to accept an unattractive offer or doing something that could have resulted in a higher dollar outcome.

Owners who want to sell their business someday must manage the exit from the start, even if it isn’t for many years. There are seven essentials for a pleasurable exit and always look at hiring a firm like Carpenter Hawke & Co. as we not only know the process but can help you plan ahead. Below is a list of things you should be thinking about:

  1. Building a strong, “hair-free” business.  Too many problems, oddities and “situations” needing explanation and excuses scare off buyers. Problem employees, failed products still bumping along, and under performing locations are just a few examples of that dreaded aspect of deals the investment bankers refer to as “hair.” One firm lost a premium public company suitor when the lavish vacations and owner’s perks run through the company books cast the owner’s ethics as “shady.” Know what will be perceived as hair, and plan to trim it back before it grows, or at least several years before a sale.
  2. Prime the business for growth, and prove it.  Most business that aren’t growing face serious internal and external obstacles to growth. Buyers will only pay a premium when they feel certain that “growth is around the corner.” Tom Hawke, managing director of Carpenter Hawke & Co., says, “Sellers often walk in my door the minute their revenues increase after having stayed flat for years.  If you are relying on a recent growth trend to justify an aggressive growth forecast (and an increased valuation), the first thing buyers will do is to ask why, to discover if it is real, sustainable, and scalable. They are always skeptical.”  Any reasonable buyer will be able to identify unsustainable growth that comes from an upward blip in the economy, from price discounting, a marketing blitz, or just luck.  It’s your job as a future seller to find the levers to top- and bottom-line growth and deliver quantifiable results. It is not easy.
  3. Building a business designed to attract specific buyers. Think forward five years from now and identify what the strongest companies in your industry will be fighting over. Create a company that, if acquired, will help them win. For example, one firm developed the first electronic devices in its industry that could automatically communicate via the web. Management intentionally established the company’s market presence in several key verticals where several behemoths were battling for dominance. Those big companies were hungry for the web-communications technology and bid up the earnings multiple to triple what comparable firms had been receiving in this industry. Ask yourself this: Who would likely buy my business, and what tempting product/service/market position can I create that will entice them to overpay?
  4. Create relationships with potential buyers. We like to do business with people we know. Give potential buyers the opportunity to know you — even years before you intend to sell — to understand who you are as a person and to understand your business. It makes them more likely to think of you first when they decide to acquire. In the process, you’ll get to know them and will better understand their objectives and business needs. Investment bankers will ask you for a list of strategic buyers at the beginning of the sale process. As you network in your industry over time, build your list.
  5. Plan your life after exit. Too many reluctantly decide to sell, begin the process but then abort as a deal comes to the table. Often it’s because the CEO/owner has nothing to look forward to and equates selling the business with being put out to pasture. The best investment bankers will avoid any seller they suspect of being a reluctant or unreasonable seller, because such behavior will cost them all their fees. Indecisive sellers can also hurt themselves. One firm had a last-minute change of heart and jilted its biggest potential strategic buyer in 2008. Three years later when it decided to sell again, the strategic buyer, irritated at being left at the altar, compared the seller’s actual 2008 to its forecast and found a 45% under performance! The buyer made its new offer low, reflecting the credibility gap. Having the next chapter of your life clarified and in front of you will keep you rational as the process rolls along.
  6. Run the sales process well. The sales process, although far from being the predominant element of M&A value creation, is a critical one. Investment bankers often play a critical role here but must be managed by the selling firm’s CEO. Don’t delegate final authority and responsibility. Just like an attorney, investment bankers are expert advisors, but the final decision comes from you.  While some CEOs have M&A experience and the skill set to represent their own firm, others can use investment bankers to get a step up in results that more than pay for their fees. Tom Hawke says, “Sellers must be explicit about what valuable competitive data should be disclosed, and when. All too often, investment bankers hand over valuable competitive data that should never be disclosed until the due diligence phase, or not at all.”  Use an M&A Advisor.
  7. Avoid post-sale headaches. Many business exits are marred by litigation and problems after the deal closes.  Earn-outs for top management are often a culprit, along with other surprises that derail the business. Particularly in seller-financed deals, the business itself is collateral, and the seller often gets a business back that is in need of repair for a few years before it’s ready for sale again. Choose a strong and competent buyer (even though it may not be the highest bidder), and be helpful to the buyer during integration and beyond.

These seven essentials are a tall order. That’s why exit planning must be a part of your strategic planning effort every year, not just when the exit day is near. Take actions that keep your business ready for exit at all times and please make sure your hire an M&A Advisor like Carpenter Hawke & Co.

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