Valley Valuations represents clients through the entire process of selling a business.
No Charge Initial Consultation
We will discuss the following as a result of your initial no charge consultation:
- The M&A process – what are the steps and established processes
- A realistic assessment of selling your business
- The Market Landscape – Buyer or Seller Market
- The Valuation Process – Academic Valuation vs M&A Valuation
- Analyzing and valuing your business – What’s involved.
- Other professionals that you may need.
- Timelines, planning, and getting ready to market and sell your business
- Our fixed fee or by-the-hour billing arrangements.
The Valuation – Choose the Correct Type for a Sale
An important step in the sale of any business is a proper business valuation. While there are many types and uses for a business valuation, it’s important that you have one prepared that is for selling your business. Some valuators will prepare an “academic valuation” which might be suitable for estate or tax purposes. However, the valuation for the sale of your business needs to be from the position of advocacy – we are trying to value, market and position your business for the greatest amount. Due to our extensive experience with these matters, Valley Valuations can prepare these valuations knowing their intended use.
As part of this process, we normalize your financial statements. This is the process of adding back items of expense that are discretionary in nature; items not necessary for the running of your business. These might be personal items that have been run through your business or expense items that another buyer would not incur. They might also include a review of your fixed asset purchases and working capital amounts to determine what is normal for your industry and your specific business. There could be one-off expenses that don’t recur every year and should be removed. Excess amounts are added back to arrive at a greater valuation for your business.
We don’t replace your current advisors such as your attorney or CPA, but work alongside them, collaboratively, to enhance the likelihood of a successful sale of your business and ultimate close. We provide answers to many of the questions you and your advisors may have. We recognize that for many, this is a once in a lifetime event and you’ve had no experience with these types of matters. And your financial advisors may not have the requisite knowledge and experience to provide the depth of services you need.
We are experts in federal and state tax law, as CPA’s, and can assist in the complex positioning of your business for sale that minimizes the tax bite. We understand that the net is what’s important in the end. We work diligently in minimizing those controllable expenses, such as taxes, to help you achieve the highest liquidity event. You owe it to yourself and your family to get the best advice when selling your business.
If you’re ready to sell, we can help you market the business. If a sale at today’s value won’t provide the amount you need, we can advise and work with you on ways to build future value. See our information and planning services for future Exit Planning.
Marketing Your Business
Valley Valuations’ targets strategic and financial buyers, as well as local and global buyers – we canvas the business landscape to find qualified buyers. We conduct extensive research to build a database of target buyers. We also have an existing database of equity investors and intermediaries who contact us frequently about businesses we may be representing. We create a tailored marketing campaign for the sale of your business and work diligently to get it in front of as many potential buyers as possible. Whether it’s local buyers or large publicly traded companies, we can find and work with them all. It’s not uncommon to have multiple buyers bidding on the purchase of your business!
One of the first items we develop is the “Deal Book”. Some call it the CIM, the Confidential Information Memorandum. It presents the critical and need-to-know facts about your company and explains its unique value proposition to buyer prospects. All potential buyers are vetted by us and sign a Confidentiality Agreement not discuss or use any information they may learn from inter-acting with us or you during this process. A good deal book contains 80% of the information buyers need to know to get a good idea of your business and the value range. The 20% balance is covered in meetings and discussions that cannot be expressed in the Deal Book. A confidentiality breach can harm your business and delay successful exit. We work in ways that protect your confidentiality and allow you to “keep to your knitting” of running your business. You don’t need the distractions and interruptions – we handle the process and are the point person directing strategy and coordination among the various parties involved. We check in with you along the way to get your input and to inform you of our progress.
Negotiations, Due Diligence & Closing
With buyer candidates contacted and screened, we’ll coordinate requests for additional information and run point on the campaign. We will introduce you to serious buyer and setup meetings and document requests in accordance with your schedule. We obtain offers and discuss the pros and cons of those offers with you. We’ll give you some comparison of what’s taking place in the marketplace for valuations. It’s not uncommon to have an auction whereby we control the timeline potential buyer candidates must submit their offers. An auction environment creates a sense of urgency and often creates additional value as buyers will approach the process with greater seriousness at risk of losing out. We assist in negotiating favorable terms and deal structure, in concert with your tax and legal advisors. Every transaction is unique, and our experience really shows at this stage of the sale. We find ways to enhance value.
Once the deal points are negotiated and settled, we coordinate due diligence, financing, third-party consents, definitive document preparation, ancillary agreements, escrow and closing. We work to resolve problems and keep the process on track. Nothing is worse than “deal drift” where various parties to the deal get off track or lose their way through the process. We are the responsible party for coordinating the process. We work with your PA’s, bankers, attorneys, landlords, appraisers, environmental consultants, government agencies and others along the way. We bring attention and cohesiveness to your deal, and keep your team focused on the right issues at the right time. We drive the close!
It’s a Process that Demands Experience
Approaching the sale of your business as a business process not to be taken lightly. Engaging a professional business intermediary or M&A advisor as we refer to ourselves, to drive the sale process is smart and pays for itself many times over. We anticipate and resolve problems, while you focus on running the business. This is how great results happen. Valley Valuations’ proven M&A process, seasoned advisors and unequaled dedication to our clients combine to produce the most successful closes; know that you are working with very experienced and dedicated professionals.
Selling your business represents the culmination of years of hard work and dedication. There’s too much at stake to short-cut this process, do it on your own or use advisors who don’t have the experience in this practice area.