Maybe you are thinking about selling your business or have made the decision already. There’s no doubt that a lot of stress and anxiety is wrapped up in selling a business, but there is also a lot of excitement. As a result, it can be easy to forget that selling a business is a multistep process, requiring careful planning in advance to maximize your potential sale.
It will most likely not happen in your timeline; always expect it to take longer than you would expect. You can avoid making basic mistakes by using an experienced broker rather than trying to sell the business yourself. VMAC Solutions has been able to get sellers a higher price than the sellers trying to sell the business themselves. You need someone to advocate for you and work with you through the whole process. An experienced broker can take the emotions out of the picture so that we can work with you and the buyer for the best outcome and win-win for both sides.
Here are three suggestions to help you navigate through this life-changing decision to help make the experience an easier process. If you are ready to sell or thinking about selling, there are many ways to plan it out to minimize mistakes and delays.
Tip #1: Gather up as much data as possible from your CPA ahead of time.
You will be asked for three years or more of tax returns, balance sheets and financials. Many delays are caused by CPAs – waiting on them to send over the info needed to present to a buyer. It is always a good idea to do quarterly financials, or every six months so your numbers stay current, in the event of a sale.
We always recommend that operators use a VMS, vending management software. An industry-built software will allow you to gather up data instantly, versus the old school method of asking drivers to write down serial numbers of equipment and credit card readers. Industry VMS software will allow you to run as many reports as needed for the buyer to review and see the snapshot of your business. The software typically allows you to export to Excel, and then you can hide the customer names until the right time comes along to provide them. An experienced broker will advise you on this process.
Tip #2: Don’t neglect your business during this process – run it as “business as normal.”
Just because you want to sell your business doesn’t mean it will sell. In many cases, there may not be a qualified buyer in your area. Don’t make any changes to the way you conduct business during this process. Even if you do have a qualified buyer ready, it could fall through, so you never want to change the way you run your operations. You don’t want your sales to decline or lose accounts during this because it could affect the final selling price. Working with a qualified and experienced broker will allow you to continue to run your business without the emotions and stress of dealing with a buyer directly. Remember, the buyers will rarely offer you their best offer directly. We have seen many operators sell for the wrong price and terms.
Tip #3: Keep it confidential.
The last thing you want to do is let your staff know that you are ready to sell your business. Don’t ever publish it on social media either. Many employees will bail on you if they think they may lose their job after you sell your business. In most cases, the buyer will want every employee, especially route drivers and service techs, but employees tend to get worried if they know you plan to sell.
A qualified business broker will know who the right buyer is for your area. They may ask you about certain competitors that you may or may not want to deal with, but we recommend being open to as many qualified buyers as possible. Sellers tend to not want to sell their business to a competing business, but sometimes, these make the best buyers. It would give them greater market share if they were to acquire you, and hopefully, some skilled route drivers and service techs as well.
ABOUT THE AUTHOR
Mike Ferguson – owner of VMAC Solutions LLC, a brokerage firm serving buyers and sellers of vending, micro market and office coffee service businesses – is a vending/OCS broker who has office refreshment business ownership and experience with over 33 years in the industry. He can be reached at 713-569-6463, email Mike@VMACsolutions.com or visit www.VMACsolutions.com.