SELLING A BUSINESS

An important part of selling a business is a complete understanding of all the assets included in the purchase or sale. At the heart of the due diligence should be a complete inventory of those assets. A prospective buyer will expect to have complete knowledge of all that is included in the purchase agreement, as surprises can be costly.

 

Importance of Recasting Financial Statements

 

As a business owner, and part of the baby boomer generation, you’ve seen your share of ups and downs in the business world.

 

If you are considering the sale of your business there are a growing number of business intermediaries and mergers and acquisitions specialists available to offer professional assistance to help you determine the value of your business and how the market might respond.

 

Most businesses track their financial performance by using balance sheets, profit and loss statements and tax returns. These reports are beneficial in determining the value of a business. In most instances it’s the cash flow that prospective buyers need to identify to better understand the health of a business. They must also understand how the money is being spent and the available opportunities to generate positive cash flow in the future.

 

The process of recasting financial statements is essential in determining the value of a business when the owner’s intentions are to sell. Recasting requires extensive investigation to ensure all relevant and appropriate adjustments are correctly reported. This is one of many services provided by a mergers and acquisitions advisor. They will examine your financials along with the historical performance of the business, and endeavor to identify keys to future performance and market opportunities.

 

The recasting process identifies items such as excessive and discretionary expenses and nonrecurring revenues and expenses. Recasting provides an economic view of the company, and allows meaningful comparisons with other investment opportunities.

 

However, the owner benefits (salary, commissions, perks, incentives, personal loans and discretionary expenses) are considered and added back into the value of the company so a future buyer can adequately assess the business, its cash flow and future earning capacity.

 

A great deal goes into the process of determining value and selling a business. Recasting the financial statements of a business provides an indication of the business value and helps an owner with accurate expectations. A BBNY mergers and acquisitions advisor will help you understand the financial statements and help you move forward toward the completion of the business sale.

 

Selling a Business is a Complex Task

 

Selling a business is a complex and often daunting task for business owners who have never sold their business before, which is why BBNY is the right choice when it comes to selling your business. Just as business owners wouldn't attempt to do their own legal or tax work, they should not attempt a "do-it-yourself" job on what is likely to be the most important deal of their business career. The right thing is to seek professional assistance when it comes to selling such an important asset. Owners frequently choose to sell their business through a business intermediary because:

 

• An owner representing him or herself cannot maintain anonymity. If confidentiality is breached, for any reason, this could seriously harm the business prior to its sale, especially if competitors or employees became prematurely aware of the sale.

   

• An owner may not be knowledgeable in current areas of law, accounting, taxes, and marketing of businesses.

   

• An owner typically does not have the ability or time to contact, screen and qualify a large group of prospects, oftentimes fifty to one hundred, before a suitable qualified buyer is identified who is serious and will offer a fair price.

 

• A BBNY M&A Advisor has the experience, knowledge, and negotiating skills to sell businesses effectively and for the best price, particularly in a highly emotional negotiation where some of the buyer's objectives are totally opposite of the owner's.

 

Working with Professionals

 

Working with a professional BBNY M&A Advisor can make the difference between an owner just selling a business or selling it to the right buyer for the right price and terms. Because of BBNY's extensive contacts with qualified buyers, we have a greater ability to find the right buyer than would business owners on their own.

 

You can rest assured that BBNY will coordinate and orchestrate the sales process until the transaction is successfully closed. This entails developing considerable documentation necessary for listing and aggressively marketing the business throughout our network. BBNY is extremely diligent and pays close attention to the minute aspects of every deal to ensure a smooth transaction. We have answers to your important questions and will support you each step along the path to a sucessful close and beyod. All the right reasons to choose BBNY.

 

In addition, BBNY works with many professionals on both the seller and buyer sides of the transaction, acting as the focal point for all interactions. BBNY coordinates the sale process with the seller's and buyers professional advisers, lenders and other relevant parties, to ensure a smooth process and change of ownership.

 

To learn more and schedule a FREE Confidential Personal and Business Review to determine if you have a viable business for sale, please call 585-624-7998 or send us an Email. We welcome your interest and questions. Download a FREE eBook "Seven critical points a business owner must know before selling a business"