Mission: Sell a Business for Absolute Maximum Sale Price
Selling a business is a sales process that includes time and direction. The business sale price ultimately received for a business for sale is greatly impacted by how the business is sold.
Maximum business for sale price is garnered through appropriate preparation of the offering documents (such as packaging); savvy execution of the proven “quiet auction” process; and deft negotiation and planning of the process by an experienced and talented dealmaker.
Why Sell a Business with APEX Business Brokers and Mergers & Acquisitions
APEX Mergers & Acquisitions business brokers affiliations with National and International Business Brokerage and Merger & Acquisition associations guarantee you that we adhere to the highest professional standards when helping you sell a business. These networks enable APEX to provide you with access to the broadest number of qualified, potential buyers to buy a business – something you just can’t get with any neighborhood real estate and business for sale firms. Instead of having access to your own local market, we connect you worldwide.
We are an Oklahoma regional firm with international reach.
Benefits of Selling a Business with APEX Business Brokers and Mergers & Acquisitions
Since APEX Mergers & Acquisitions business brokers specialize in the sale of businesses, you won’t find more knowledgeable business brokers anywhere. APEX Mergers & Acquisitions business brokers use the same care in finding a buyer for your business for sale that we would if we were selling our own, since we have all been successful business owners and/or managers before joining the firm. Selling a business with an experienced business broker can help minimize sale time.
APEX Mergers & Acquisitions business brokers can prepare a professional business valuation of your business to determine its fair market value and ensure that it’s priced appropriately, normally allowing us to sell a business faster.
Our business brokers also create a complete Offering Portfolio that provides more information about your business for sale. This includes the type of detailed information that a registered, qualified buyer will want to know to help them decide on buying a business. Our experience is that this unique APEX Mergers & Acquisitions service helps us sell a business faster and for more value. Spending more time and attention preparing the business for sale results in a smoother sale, when selling the business.
APEX Mergers & Acquisitions business brokers design a custom plan to promote your business for sale to likely buyers. This may include targeted marketing, direct mail, consumer and/or trade advertising, etc. as appropriate.
We directly market your business through our global networks. This means that you have hundreds of offices and thousands of groups working with us to find just the right buyer to sell your business.
Understanding the importance of maintaining confidentiality, we take information about your business for sale and share it with potential buyers in stages only as their level of interest heightens. APEX Mergers & Acquisitions business brokers do not disclose confidential information without a signed Confidentiality Agreement and work toward a full disclosure with either an Offer to Purchase or a Letter of Intent.
APEX Mergers & Acquisitions business brokers will use our banking contacts to assist the buyer in arranging financing to buy your business. This includes traditional financing or SBA small business loans. By doing this we can also help to minimize the amount of seller financing, if any, needed.
Listing a business for sale is only the first step in selling a business, and one of our business brokers will be with you to assist throughout the entire process including the closing.
8 Key Steps to Selling Your Oklahoma Based Business
Valuing your company, negotiating the deal, and creating a sales agreement.
This year thousands of American businesses will be sold. Most will be small and mid-sized businesses like yours. If you are thinking of selling, consider these practical steps for making the process go smoothly.
- Determine a Realistic Price Range
If the price of your business for sale is too high, you’ll scare away buyers. If your price is too low, you’ll risk selling at a bargain basement discount. Your goal is to figure out a range that is realistic to sell your business.
Pricing a business for sale is both an art and a science; there are several methods you can use. For example, you can base the price on the value of the business’s assets, and add in a sum for the goodwill the business for sale has developed. You can also see what comparable businesses for sale in your industry and locale what they have recently sold for. Or you can use an industry formula (for example, a value based on the number of units sold annually or a multiple of average earnings) that will help set a price range to sell your business.
- Understand the Consequences
Taxes can take a huge bite out of the money you receive for the sale of your business. It pays to know just how big that tax bite will be – and to try to lower it if possible. Be aware that taxes can get complicated. You will probably need help from a CPA or other tax expert.
Your tax bill will be influenced by two key factors: How your business is legally set up and, in the case of a corporation or LLC, whether you’re selling the business assets or the entity. Sales of all sole proprietorships, almost all partnerships, and sales of many corporations and LLCs are asset sales.
In an entity sale, you sell all of the corporate stock in the company or all LLC members’ membership interests. The buyer winds up owning the entity itself. In that case, the stock or membership interests are treated as capital assets. This means the gain is taxed at the low, long-term capital rate- assuming you owned the stock or membership interests for more than a year.
In an asset sale, you allocate the sale price to the various assets, and you classify the assets in seven IRS classes, such as inventory, other tangible property, and goodwill. For example, furniture, equipment, supply contracts, the business for sale name. For example, furniture, equipment, supply contracts, the business for sale name. The gain from a property in some classes is taxed at ordinary income rates. The gain from a property in other classes is taxed at the long-term capital gain rate if owned for more than a year.
- Prepare Your Business for Sale
The getting-ready process includes sprucing up your business for sale premises – everything should be attractive and orderly. More importantly, get your numbers in good shape. Consider recasting your tax-return numbers for prospective buyers. This can involve, for example, adding back to your profits discretionary expenses such as:
- Medical insurance for you and your family
- Travel and entertainment
- Conventions and trade shows
- Expensive cars owned or leased by the business
- Club memberships
- Subscriptions to magazines, newspapers, and electronic services
- Continuing education expenses, and
- Salaries and bonuses paid to family members who work in the business for sale
- For instance, let’s say you enjoy travel so you’ve been attending trade shows at attractive locations. You’ve deducted the cost as legitimate business expenses – lowering your tax bill, but also lowering the bottom line.
A buyer needs to understand that travel is discretionary. If it’s eliminated, the business for sale will show more profit for its new owner. In recasting your tax numbers, you’re not deceiving either the IRS or prospective buyers. You’re simply pointing out that the buyer may prefer not to spend money on some of these items in the future, even though you’ve taken a perfectly proper tax deduction for them.
- Seek Potential Buyers to Buy a Business
If your business for sale is well known, the word that it’s for sale may be enough to bring prospective buyers to your doorstep. Or, possibly someone close to you – an employee, a relative, a friend, a supplier, or a customer – could be a prospect.
But finding buyers to buy a business may not be easy. More likely, you’ll need to reach out to a bigger pool of potential buyers. This often includes putting ads in newspapers, in trade publications, and on business buy or sell, sale websites.
Engage a business broker to reach more buyers – though you’ll pay a substantial commission for the broker’s services. Sometimes, you need to keep a low profile in your marketing efforts to avoid alarming customers and suppliers. An intermediary such as a business broker can help keep information from leaking prematurely.
- Negotiate Your Deal
Once an interested buyer is attracted to your business for sale, you need to work out the terms of the sale. Here are some key questions to ask yourself:
- Will you sell your business entity or just its assets?
- Will you keep some of the assets (a car or track, perhaps) that are currently being used in the business for sale?
- Will the buyer pay you in one lump sum or make installment payments?
- In an installment sale, how large will the down payment be and how long will the buyer be given to pay off the balance?
- After the closing, will you work for the buyer, either as an employee or an independent contractor?
- Will the buyer require you to sign a non-compete agreement that limits your right to work in your current industry?
- Sign a Sales Agreement
Once you have worked out the key terms with the buyer, you need to put the deal in writing. Among other things, you’ll need to list all of the assets the buyer is purchasing and the value you will assign to those assets for tax purposes and any business contracts the buyer is assuming, including business leases. Your sales agreement should also include protections that assure you will get paid the full sale price.
- The Closing
The closing is the meeting at which you transfer the business for sale to the buyer. To reduce the chance of last-minute hassles, make a checklist of all the papers you’ll be bringing and all that the buyer is expected to bring. While every business for sale is different, here’s a list of common documents and items that you may need to bring with you.
- Alarm codes, computer access codes, and safe combinations
- Asset allocation statement (IRS Form 8594)
- Bill of sale or transfer documents for license, real estate, and vehicles
- Cashier’s check
- Consent of entity owners to the sale of assets
- Consulting contract (independent contractor agreement)
- Covenant not to compete (non-compete agreement)
- Customer lists
- Employment contract
- Escrow agreement for post-closing adjustments
- Insurance certificates for the policy covering secured assets
- Keys to file cabinets, premises, and vehicles
- Mortgage or deed of trust owners’ manuals for business equipment
- Promissory note
- Security agreement
- Statement regarding the absence of creditors
- Supplier lists
- Title insurance commitment
- UCC financing statement
- File Paperwork with the IRS
After the sale, you and the buyer need to complete IRS Form 8594, Asset Acquisition Statement, and file it with your tax returns for the year in which the sale took place. You and the buyer should fill out the form together, allocating the purchase price among the assets purchased and classifying the assets among the various IRS categories, and file duplicate copies of the form.