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15 Steps To Selling Your Business

ZELD Alliance has developed a 15-step process to sell your business efficiently and confidentially for the highest price. Some of the steps occur simultaneously, so it can be a relatively quick process if both buyer and seller are motivated to perform the steps in a timely fashion. In fact, we are usually able to get to step 9 (which is introducing a qualified buyer to the seller) within 1 to 8 weeks from the start of our business sale process. An Experienced M&A Advisor will guide you through each step of the process of selling your company. You can watch our video on the 15 steps or read about them below.

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15-Step Sales Process for Selling your Company

1. Confidential Consultation

Step 1: Explore the Possibility of Selling Your Business

The journey to selling your business begins with a simple, no-commitment conversation. You don’t need to be 100% decided; our  Confidential Consultation is designed to give you clarity without pressure.

During this initial discussion, we’ll learn about your company and provide a ballpark valuation range based on key details you share. From there, you can decide whether to dive deeper or schedule an in-person meeting.

To estimate a potential sale price, we’ll ask a few straightforward questions, such as:

  • What type of business do you own?
  • Who are your main customers?
  • How many employees do you have?
  • What is your role in the company?
  • What is your annual revenue?
  • How much do you personally earn from the business?
  • Is your business growing, declining, or stable?
  • Why are you considering a sale at this time?
  • Do any customers account for more than 25% of your revenue?

With this information, we can quickly give you a realistic estimate of what buyers may be willing to pay.

No Rush – Think It Over
If you’re not ready to meet immediately, that’s perfectly fine. Take time to reflect. If valuation is your only concern, holding onto the business might be the better choice.

But if you have a personal motivation, such as:

  • Retirement
  • Relocation
  • New business ventures
  • Health concerns
  • Partner disputes

Then it may be the right time to move forward. The whole sale process typically takes 3 to 12 months from start to close.

Pricing Strategy Matters
Your asking price directly impacts how quickly your business sells. We’ll recommend a competitive price range during the consultation.
For a precise valuation, we’ll need to review your financials in more detail during the next step.

Before you release your financial information to us, we can sign a confidentiality agreement. Then, we’ll request the tax returns for the last three years and a current year-to-date profit and loss statement. We’ll also want to understand what your total owner’s income is, including your salary, benefits, perks, and net income. We will take a look at the trends in your business and ask you some more questions about the company to get a complete picture of the growth opportunities for the business. Other items include the approximate value of your business’s assets, including inventory, equipment, etc.

In addition to the financial information, we want to get a good understanding of your business. We’ll want to know how you compare to your competitors, what’s unique about your business, and what the growth opportunities are. This information will be used along with your financial information to compare your business to what other similar companies have sold for. This will allow us to give you a possible asking price for the business. We’ll get your feedback and see if our price estimate is in line with what you are willing to sell the business for. Every business is unique, but buyers will compare your company to similar businesses to determine how much to offer for the business, so we need to be within buyers’ expectations.

At this point, you can decide whether to move forward or not. We’ll also tell you if we don’t think we can meet your needs. ZELD Alliance only gets paid if we sell your company, so it’s essential for us to feel confident that your pricing expectations give us a reasonable chance of succeeding. If you decide to move forward and sign our Engagement Agreement, we’ll proceed to the next step in the Business Sales Process.

Usually, at this stage, we have enough information to start working on the initial marketing documents. We will need to write two documents. The first one is sometimes called a Teaser because it’s designed to give an overview of your business without too much detail, so someone can guess which company is being offered for sale. The teaser is typically a one-page document. It will not contain the name of your company or a specific address. It will describe your business in general terms and provide a general location. For an example of our teasers, you can visit our Businesses for Sale page.

 

After they review the teaser, a Buyer will need to sign a Non-Disclosure Agreement and provide us with information about their background, skills, and financial capabilities. Once the buyer has demonstrated their qualifications, we can provide them with a more detailed second document, a confidential information memorandum (CIM). This document will contain specific information about your business. 

We will use our expertise to create both marketing documents, but we’ll certainly need your assistance in providing us with information. We welcome your opinion and suggestions. After all, it’s your business, and no one knows it better. We’ll need enough information to present the company in a favorable light that gets people interested while also providing a realistic picture of the business. In the Teaser document, we will balance providing enough information with the need to retain your business’s anonymity during the sales process. With the confidential information memorandum, we will provide more details about the company. This document can grow over time as we get more information and answers to buyers’ questions, and as we gain an in-depth understanding of the questions buyers have about your business.

ZELD Alliance will promote the teaser for your business in several ways across many platforms. We advertise on Google, Facebook, LinkedIn, Bizbuysell, the Wall Street Journal’s website, the NY Times website, Yahoo, Bing, YouTube, BusinessBroker.net, IBBA.org, Businessesforsale.com, Dealstream, Bizquest, Synergybb.com, and more. In addition to advertising, we have a database of over 40,000 potential buyers that we will contact.

ZELD Alliance specializes in selling companies in Construction, Manufacturing, Technology, Healthcare, Distribution, Engineering, Services, and Transportation. In all of these categories, we have numerous buyers that we’ll contact, including public and private companies, private equity groups, and wealthy entrepreneurs interested in buying businesses in these industries. We have companies in every one of these industries that are expanding by acquiring companies in these industries, as well as related companies that they can leverage to grow their business. They can often take your products or services to a broader market through their sales and distribution network.

Private equity groups usually combine one or more synergistic companies in these industries to leverage the strengths of the companies they acquire. Wealthy entrepreneurs will seek to acquire companies that they can grow by leveraging their skills, experience, and network of contacts.

From our advertising and marketing, we always have a number of interested potential buyers in the industries that we specialize in. Before we provide details, they’ll sign a confidentiality agreement and provide us with info on their qualifications. We’ll start narrowing down which buyers are qualified and interested so we can provide details.

Finding the perfect buyer takes time. We connect with numerous potential buyers, and the ideal one/s will possess the right skills, motivation, and a genuine interest in acquiring your specific company. Their fit depends on various factors, including your location, products, and services. We will carefully assess each candidate before they proceed to the next step in the process of selling your company.

When there is initial interest from a qualified buyer, we will discuss the business with them and answer any questions we can. We’ll also get a feel for their timeframe and motivation, as well as a greater understanding of why they are interested in your business specifically. When we have one that is a good fit, we’ll contact you.

We will provide information on the potential buyer’s background and interests, and set up a phone call or meeting with you. This is an excellent opportunity to learn more on both sides. It’s also an opportunity to see whether this person can take over your business. So while they are deciding whether they are interested, you can also make up your mind about the buyer. We’ll do our best to introduce you to people we think you will be comfortable with, but at the end of the day, it is your decision.

We recommend that you be open and honest about your business. It’s good to be optimistic about what your company has to offer. However, you also want to point out areas where you think a new buyer could improve on what you have done and offer ideas for taking the business to the next level. Buyers will usually want to know about your staff’s expertise, your customers and suppliers, your role in the company, etc. Even though they have a lot of this information, they usually want to get more details directly from the seller before making an offer.

Once buyers have enough knowledge and answers to their questions, we’ll determine which are severe enough to make a written offer. On most businesses we sell, we’re able to get multiple offers. We’ll go over each offer with you and discuss not only the price but also other terms, such as the sale terms, due diligence requirements, and our assessment of the buyer’s likelihood to close. We will consider whether they need financing, their interest in moving quickly, and more.

If we are discussing several offers with you, we may decide to focus on the best one or two to see if we can negotiate terms with one that is most likely to close the deal, and to see if they can provide terms that are acceptable to you. In addition to the payment price and terms, we’ll also need to discuss the length of the transition period, the due diligence they plan to perform, and their plans for running the company. We have seen hundreds of offer letters, so we have experience deciphering the pros and cons. What is included in the sale may be a point of negotiation, such as accounts receivable, payables, inventory, and whether they are buying the corporation or just the assets of the business.

Once the terms of the offer letter are agreed to, both sides will sign a letter of intent. The buyer will usually have 60 to 90 days to complete due diligence. A signed letter of intent will stipulate whether the buyer has an exclusive period during which only they can pursue the business, while both of you are investing time in the due diligence process.

The amount of due diligence each buyer requests varies depending on the size of the deal, the buyer’s background, and the available information. If bank financing is involved, the bank will also require due diligence information. Usually, the buyer will have their accountant review information and request information from the seller and their accountant. In addition to the financial information, they will want their lawyer to view any contracts that the seller’s business has with suppliers, customers, and employees.

Due diligence is designed to confirm that the business is what was stated to the potential buyer by the seller and broker. In addition, they want to see whether there are any issues that could cause problems for the new buyers, such as pending lawsuits or a large customer who has canceled their contract. During the review process, the buyer, their attorney, and accountant will have questions. Once the information is reviewed and the questions are answered to the buyer’s satisfaction, the next step in the business sale process is for the attorneys to negotiate the purchase agreement.

More often than not, the seller’s attorney will draft the contract and send it to the buyer’s attorney for review. The buyer’s attorney will review any issues with the buyer and, in most cases, request changes to the purchase agreement. Usually, there is a give-and-take between attorneys and buyers and sellers, with any final terms to be negotiated. If the attorneys can’t agree on how to move forward, an experienced business broker will arrange a conference call or meeting with everyone involved to try to resolve any issues that are preventing the deal from proceeding. Once the issues are resolved, the final step in the business sales process is to set up a closing date.

Usually, the Purchase Agreement is signed before closing, but sometimes everything is agreed to, and a closing date is set with the plan to sign the agreement at closing. Often, the closing takes place at the buyer or seller’s attorney’s office, with all parties present to finalize the deal and exchange payment. However, sometimes the closing is handled virtually with an electronic signature, and the funds are paid via wire transfer to the seller’s bank account.

Congratulations, the deal is closed. Now, the seller will typically provide a transition period, negotiated during which they will help the buyer take over the business’s functions and assist in understanding the customers, products, services, and employees. The transition period can range from a few days to several years, depending on the needs and desires of both the buyer and the seller. If the transition period is longer than a month or two, a salary is typically negotiated before closing, with the seller paid based on how much they plan to work. Often, it starts as full-time and moves to part-time. Then the business is handed over to the buyer, who operates it independently after receiving training from the seller.

Contact ZELD Alliance team

We hope you now have a better understanding of the steps and process to sell your company. Every Business Sale Process is slightly different, and some steps in the process occur simultaneously to move things along quickly. We have Senior, Experienced M&A Advisors who sell companies throughout the United States as well as overseas in the industries that we specialize in. There is no fee for our services until we have taken you to the final step and closed the sale of your company.
You can see some of the companies that we have sold at Closed Deals, and you can read some customer reviews and watch some videos at Testimonials. We look forward to speaking with you and answering any questions you might have about any of the steps in the business sales process. We take a collaborative approach in working with you because you are an expert in your business, and we are experts in the process of selling a company, so working together, we get the best results.

Ready to Take the Next Step?

Whether you’re buying, selling, or scaling, let’s talk about how we can help you achieve your business goals.

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