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I want to sell my business now… How do I know if the time is right?

We have received calls from numerous business owners that were planning to go to Market within the next six months, asking what they should do now. They want to know: Is now the time to go to Market? What type of Buyers are we seeing? What should business owners do if they are nearing the right time for a transition and they don’t want to wait?

It may be the right time to start the process of selling your business, or it may not be – it all depends on the business itself, the industry, and a variety of other factors. Daily, we are speaking to Buyers looking for a good fit. Many are Private Equity firms – either directly or through their portfolio companies. We are also seeing Strategic Buyers looking for a “deal,” Private “cash” Buyers who are afraid they missed an opportunity to own their own business, and Family Business Offices looking for that fit that they can hold long-term.

If you have a unique business that has been insulated from the downturn, you will look like a “diamond in the rough” to a variety of Buyers. If you can demonstrate that this downturn is a blip in the economy and that you will be back to normal revenues and profits in fairly short order, you will get Buyers’ attention. If you need to sell now, there are always Buyers looking for a “deal.”

Our advice – if your business continues to do well and the future looks good, now is the time to shine. There is not as much competition from other Sellers, so Buyers have more time to focus on good businesses and plans for growing them.  

Now that you have taken care of some of the business basics, what should you do now if you are in a position to transition soon?

1) Clean up the books and records, know what third-party consents you will need, and look into other “Deal Killers” such as forgotten agreements or verbal commitments to employees, landlords, key customers, vendors, the terms of loans or leases, etc.

2) Be able to articulate how your business has dealt with the COVID-19 pandemic and the company’s plan to be successful into the future. 

3) Talk to your Financial Advisor and discuss a realistic model showing how much cash you will need to have the lifestyle you want. This exercise may help you decide “how much is enough” and ultimately help you decide if now is the right time.

4) Consider how, when, and what you want to say to those who will be affected by the impending business transition. This includes family, friends, associates, employees, etc.

5) Talk to Business Brokers, get an estimate of value for your business, and be realistic – don’t hear what you want to hear – ask yourself, “What would I pay for this company if I was buying it today?”

6) Spend time with your Investment Banker/Broker to ensure they understand your goals for a transaction. Use their experience to help you “spruce up” the company to appeal to the largest group of Buyers. Ensure they communicate with your inner circle of professionals: Attorneys, CPA’s, Shareholders/Stakeholders, and other Advisors who have a vested interest in the best outcome for you and your business. This upfront investment of time will pay dividends throughout the process.  

Contact Performance Business Brokers for your buying or selling needs
info@performancebb.ca

What Is Due Diligence and Why Is it important?

Essentially, due diligence is a thorough investigation which will be carried out by a prospective purchaser prior to signing a purchase agreement, but after a formal offer has been presented and accepted. Due diligence is an integral part of the purchasing process and is important that both sellers and perchasers know what this process is for and what it entails.

The main question the buyer wants answering is, ‘is this business worth what I am paying?’ Thus, the financial position of the business will be thoroughly reviewed in order to verify the information you have provided is accurate and representative of the business’ performance. As part of this, the assets, liabilities, cash flow and general financial management of the business will be analysed amongst other financial aspects. However, it does stop there.

Due diligence is a comprehensive process and also typically involves an examination of the legal structure of the business including its position regarding property, assets, staff and will flag any potential litigation being brought against the company. Wider environmental, sector and competitor research will also be undertaken if applicable.

As a seller, you may be frustrated if the process takes longer than you would like, or you feel worried or anxious about the whole process. Keep in mind that due diligence is a vital step in the buying and selling process, and take comfort in the fact that this kind of in-depth examination of your business shows the potential purchaser is serious about purchasing.

It is in your best interest to remain patient throughout and respond to any questions or requests in a timely and honest manner. Withholding information or being generally difficult may come across as though you have something to hide, which will not only prolong the due diligence process further, but may also harm your chances of completing the deal.
It is highly unlikely you will find a buyer who does not want to conduct due diligence on your business, therefore, it is advisable that you prepare for this process. Completing your own due diligence prior to putting your business up for sale can pay dividends in the long-term.

Putting yourself in the shoes of a potential buyer and completing your own due diligence on your business can help you to uncover any weaknesses in the business giving you the chance to improve on these before selling, thereby maximising the price you are able to recieve. The report produced as part of this process can act as a useful document for prospective buyers.

A Performance Business Broker will be able to help you prepare your business for sale, including undertaking due diligence, and will be there to guide you through the entire process through to completion.

Contact us today to start the discussion on selling your business. info@performancebb.ca

When is the right time to sell my business?

This is a question which does not have a one size fits all answer. That is because each business is different and each business owner is different. For some, deciding to sell is decided due to the financials, for others it is a much more personal desire which drives them.

The financials are important; for most, the desire to make money is the very reason they set up their business in the first place. With this in mind, it therefore makes sense to sell your business when it is riding high if you want to achieve the best price for it; it goes without saying that a profitable business is a more desirable one in the eyes of potential buyers.

A business with falling profits is unlikely to be as desirable, and furthermore, those who are interested in purchasing this type of business will be looking to negotiate hard when it comes to price.

There are also reasons beyond the financial that may see you considering selling your business. Life events such as divorce or the death of a business partner may force your hand. Other personal reasons such as stress and the day to day running of the company becoming too much for you to want to deal with anymore are also compelling reasons. If this is where you are, then the timing is more about selling up at a time which is the best for you and your current situation. While getting a good price is still a main objective, the financials may need to take a back seat and become secondary to the necessity to sell.

When it comes to getting the best price, timing is everything. The problem with this is that it is very difficult to predict with absolute certainty the future and what it holds for your business. However there are certain trends you can be on the lookout for regarding both your business and the sector you are a part of as a whole. It is also easier to sell when the overall financial market is healthy and obtaining finance a relatively easy proposition.

Why do I need a NDA when selling my business?

The nature of selling a business means you must divulge various pieces of financial information that, in normal circumstances, would remain confidential from your competitors and the public.

There is no way of helping this information to remain confidential, other than by using a legally-drafted non-disclosure agreement, or NDA. This is intended to prevent disclosure of sensitive information using the threat of legal action against any party who contravenes the agreement, and breaches your confidentiality.

The threat of having your ideas or trade secrets stolen, or your commercial data used to gain a competitive advantage, is considerable and far-reaching. An NDA essentially makes the recipient legally-obliged to meet its terms and conditions.

What exactly is a non-disclosure agreement?

A non-disclosure agreement, also known as a confidentiality agreement, is a formally-drafted document that becomes part of your business sale. It is signed by anyone wishing to receive the sales memorandum, which is the initial set of information distributed to interested parties.

The NDA protects the goodwill of the business, and the information that will be disclosed. It is an essential element of selling a business that safeguards your confidential data, facts and figures, and other particulars, from competitor gain.

What can be protected by an NDA?

Various pieces of information that are not publicly available can be protected by a non-disclosure agreement, potentially including:

  • Details of a new product line
  • New technology or innovations
  • Business plans
  • Financial information
  • Databases
  • Customer and supplier name
  • Employee details

What are the main elements of an NDA?

Essential elements of a non-disclosure agreement include detailing the parties to the contract, the specific information that should remain confidential, and the length of time that applies.

Defining the purpose of the provision of this information, and how the information contained in the NDA can be used, should also be clearly stated. In the case of selling your business, this is likely to be for evaluating your business proposition.

You will also need to include details of who the recipient can share this information with – they may need to show their accountant, for example, or their solicitor.

What are the benefits of an NDA when selling your business?

The fact that you are selling your business is, in itself, highly sensitive information in a commercial sense, and using a non-disclosure agreement offers several key benefits even when you trust the other party to maintain confidentiality:

  • Your buyer may already operate in the same industry, in which case, if they decide not to go any further, there is nothing to prevent them using the information provided in the sales memorandum for competitive purposes.
  • If negotiations fail at a later stage and you wish to exit the deal, you can do so knowing that you have a legal claim against the other party should they make use of the disclosed information.
  • If they did use your confidential information for commercial benefit, or indeed in any way other than for the purpose defined in your NDA, you may be able to take legal action against them.

Although they cannot provide guaranteed protection against the future use of your confidential information, non-disclosure agreements offer an effective deterrent which is valuable in itself.

If you would like further information about a non-disclosure agreement for your business sale, contact us at Performance Business Brokers.

Wake Up And Smell The Coffee… And Opportunity!

Performance Business Brokers Presents – This new hip specialty coffee shop in a high traffic location is serving the best espresso drinks in Edmonton at this time. Using a premium international coffee brand, they offer 11 different blend options of espresso and have created their own exclusive specialty drinks.

The cafe is fully equipped, tastefully decorated and is also staffed by a loyal and fun team of one full-time staff and two casual staff supporting its owner-operator running the show!

The cafe prides itself on serving to its devoted patrons the very best mouth-watering food, with that home-cooked touch. a light menu covering breakfast, soups and sandwiches for lunch and fine pastries for the time in between, all complemented with an easy-going modern atmosphere that adds to the overall experience.

This location and model has been built to be franchised if the new owner choices to do so.  Everything is in place to move forward into a franchisable business.

So, do not wait and contact us today for more details!  Dwight Lester 780-756-2990 or info@performancebb.ca

Franchise Pet Food Store For Sale in Edmonton

This high volume pet store is in an ideal location, in a high traffic shopping center, centrally located to the perfect demographics for this type of business. It has been established for over 10 years and has flourished as the go-to pet store for dog and cat food, supplements, accessories, toys, treats, leashes, collars, and professional advice on care and feeding of dogs and cats. This business has been built upon its reputation for quality service and advice, professionalism, and caring for each customer individually. This store is part of a national franchise with over 50 stores in Canada.

The business also has a dog grooming room that is subleased out.

This is a totally turnkey business just waiting for the new owner to take it to the next level. This is a diamond mine just waiting for the new owner to start harvesting the diamonds and reaping the profits.

For complete details contact Dwight Lester, 780-499-2386 or info@performancebb.ca

 

UPS STORE IN EDMONTON

The number 3 producing UPS store in Edmonton is for sale. The Business is supported by a well recognized name brand business which supports commercial and neighborhood businesses with copying and digital printing solutions, document services, shipping options, full-service packaging, or mailboxes services.

The UPS store franchisees which will provide professional training and support for the new owners with a network of over 340 other locations across Canada.

Priced well below what a new location would cost with income being generated from day one. Enjoy the enormous strength limitless potential of solid industry name brand recognition with great lease and location and term. Price includes all lease holds, inventory and furniture, fixtures and equipment.

Please contact Dwight Lester (780) 756-2990 or info@performancebb.ca find out how easy it is become an owner of this great opportunity.

SOLD – Edmonton Furniture Store for Sale

This is a well-known high-end furniture store with a long time base of clients. It sells middle to high end contemporary and traditional style furniture. The store is known for the high quality of its products. Most of the inventory is made in Canada with a bit imported from the USA.

The Company has been in business over twenty years with current owners in place since 1997. The owners are retiring and want to sell. There is a full complement of staff in place that have been with the business for many years.

There is room to increase profits through updating/modernizing the back office procedures.

The year-end of 2014 shows the highest revenue ever for the business. This is not a shrinking business. Current 2015 shows the business tracking even better than 2014.

Inventory is also available at owners cost.

Don’t miss out on this opportunity. Call or email today, Dwight Lester, 780-756-2990 or info@performancebb.ca .

SOLD – Lash and Brow Studio For Sale

Are you looking to be your own boss? Are you looking to be an absentee owner? This business will allow you to be both?

This spa business is into its third year and has had huge increases year over year and is still growing.

It is located in the Edmonton area and is new, trendy and has a modern look and feel.

The business is fully staffed which will remain on and continue to grow the business.  Lots of repeat clients and new clients via word of mouth.

The space is 1100 sq. ft. with 3 years left with an option to renew for 5 years.  Great lease rate in place with a very good landlord.

Contact Dwight Lester, 780 – 756 – 2990 or by email at info@performancebb.ca

 

Very Well Equipped Machine Shop For Sale

This well-regarded Edmonton based Company specializes in the development and manufacture of parts and components, precision CNC Machining services and Repair Solutions.  Their products are used by a variety of industries and sectors. The Company’s customer base of loyal customers are primarily located in Alberta, however they do serve some international markets.

The Company has a great reputation for comprehensive equipment capabilities, value-added services and a staunch focus on customer service; which, results in excellent customer relationships and high rate of repeat business. Significant growth potential exists via more aggressive business development efforts, expanded service offerings, as well as geographic expansion.

The Company prides itself on its ability to produce custom precision products to meet exacting specifications. This competency has allowed the company to develop long term customer relationships, leading to repeat and referral business.

This dynamic and forward thinking company has consistently invested in new equipment. It offers its customers the best manufacturing technologies and service; ensuring demanding standards of quality are achieved.

Given its robust equipment, which has been appraised at over $ 2 million, the Company has additional capacity available throughout their large shop.  With close to 20 employees no project is too big to be handled. The only limitation is the 10 Ton crane.

For more information on this business contact Dwight Lester at 780-756-2990 or at info@performancebb.ca