Sell Your Business

When a potential buyer comes to look at your car for sale, they are there because they do hope to buy it. So, you make it easy for them. Your car is clean; the maintenance records are organized, up-to-date, and available for their review; and there are no current mechanical issues with the car. It is the same concept with your business – "Make It Easy For Them To Buy It"

Our recommended steps to best position your business for a sale include:

1. Meet with your CPA and ensure you:
   1. have accurate financial statements for the past three years. This includes income statements and annual balance sheets. Begin to organize all supporting documentation;
   2. prepare an aging schedule for your accounts receivable and accounts payables;
   3. have your federal income tax returns for the most recent three years; and
   4. understand the tax consequences of selling your business, so you have no surprises.
2. Honestly identify & assess the reasons for selling your business. You will be asked this question many times.
3. Stay focused on your business operations, and continue to do all the things that made your business successful….."Keep the Pedal to the Metal"
4. Ensure your business location is clean, neat and orderly. Remove all obsolete and / or unused equipment, machinery, and inventory.
5. Prepare an Organizational Chart.
6. Identify Key Employees / Positions and summarize their job description, education, training and experience. This gives a potential buyer a vision of how things work, and reinforces the idea your business is well defined and orderly.
7. Maintain positive relationships with your employees, vendors, and customers, because those relationships are crucial to any potential buyer.
8. Resolve any pending litigation or regulatory issues.
9. Ensure all licenses, permits, certificates, leases, and employee contracts are up-to-date.

First Meeting: We provide you a Non-Disclosure Agreement so you know we are serious about your confidentiality. Once signed, it's your opportunity to ask any and all questions of the Bridgestone Group, so to evaluate if we are the right business broker for you. And, it's our opportunity to evaluate whether your business is properly positioned and ready for sale. After you had time to consider your options and you choose the Bridgestone Group, we execute a Listing Agreement and our work begins.

Second Meeting: Following our company motto…."To Sell Your Business, We Must Know Your Business", we conduct a detailed and thorough interview with all owners concerning the business. We tour your facilities and request all necessary financial statements and other related documents to initiate the Valuation process.

Three prominent valuation techniques used by Business Brokers are the Market Approach, Income Approach, and Asset Approach. At the Bridgestone Group, we calculate value using a combination of methods to best determine the value of your business, before any premiums or discounts are considered.

Simply stated, the Market Approach is much like a real estate transaction, where comps are used as an indication of value. The Income Approach values your business based on the present value of the future income stream it will bring to your buyer. The Asset Approach takes the Fair Market Value of all your business assets and subtracts the value of all your debt. At the Bridgestone Group, our team has the experience to calculate the value of your business with confidence.

We create a "Marketing Plan Designed to Obtain the Highest Offer". As our client, you review and approve all marketing materials before they are distributed.

"Confidentiality is Key": all marketing materials are designed to keep your business confidential. You do not want employees, vendors, or customers to know you are selling this early in the process.

"Get the Word Out": the first thing potential buyers will receive, is a one-page confidential overview of your business. This may include your industry, location, summary of key financial information, and other key investment highlights. This confidential and public marketing is distributed in a variety of ways. First to strategic (same industry) buyers and to Private Equity Markets. Then to the open market by advertising across several websites.

If a buyer is interested and we successfully vet them, with your approval we will send them an NDA and then our comprehensive marketing package.

"We Save You Time by Bringing Only Highly Qualified Buyers to the Table": once potential buyers respond to our initial marketing effort, we begin the Screening process. Screening ensures we identify the serious and financially capable buyers. At the BridgeStone Group, we recognize for each qualified buyer, there are typically several unqualified buyers who have expressed interest. To prioritize your time, we bring only the best candidates to you.

Therefore, we first evaluate whether they have the financial capacity to purchase your business. We then assess their motivation and experience within your business industry.

Once we have successfully screened a buyer, and upon your approval, we will have them sign an NDA / Confidentiality Agreement and provide them additional financial statements and marketing materials designed to give them a better understanding of your business. They will have initial questions and we will work with them by answering all questions and facilitating the transfer of relevant documents.

After much discussion and document review, a potential buyer will want to meet you and tour the facility before making an offer. These meetings are a great chance for you to get to know the prospective buyer and explain your business, and for the buyer to resolve any remaining questions. These meetings typically remain high-level and related to strategy, company history, nature of business, etc. These meetings are typically held at your office after work hours when employees have left. The buyer also can use this time to tour the facility and evaluate the condition of the equipment and building. The smaller details and fact checking are typically handled during the Due Diligence phase, after an offer has been accepted. Generally, a buyer will only request one in-person meeting before submitting an offer, referred to as a Letter of Intent (LOI).

Letter of Intent (LOI): a buyer will submit a LOI which details the "high-level" structure of a future formal & binding offer. It typically defines the overall price, the seller's carry amount (if any), associated terms, amount of equipment, real estate and inventory included in the deal, the Due Diligence timeframe, the transition period, and a few other terms.

The LOI is the first real commitment you and the buyer make to each other. The buyer is expressing their desire to buy your business at a specific price and terms. The LOI mainly serves as a template for an official Purchase Agreement that will be drafted after a successful Due Diligence period.

The timeline and structure of the Due Diligence phase is stated in the LOI, but a typical timeline is 14-30 days. During this period, the buyer will typically ask for several documents to verify the financial statements and other assertions made by the seller. Essentially, the buyer is trying to develop a level of comfort with the business operations by verifying the revenue & expenses, determine if there is any possible customer or employee turnover, the experience and stability of the staff, and much more. Gathering all the due diligence materials can be demanding, especially if your financials and / or other documents are not well organized. We strongly recommend you get such documents in order prior to Due Diligence, so there is no unnecessary delays.

Once we are successfully through the Due Diligence phase, the Attorneys and CPAs become heavily involved. The buyer will hire an attorney to draft a Purchase Agreement. The document will they go back-and-forth until you and the buyer agreed to the terms and sign off. And, when all other issues have been properly addressed, we have a "closing" which is a very simple and standard process. By the time the deal closes, you will know the buyer well through multiple interactions, which is important as transitions require patience and can often be challenging.