Going concern companies are valued based on the free cash flow they are likely to generate for the buyer or future owner. There are three key inputs to determine the value of your company; its historic earnings or free cash flow, its historic growth rate, and a current market multiple. As a result, the value of your business changes based on your company’s performance over time. Please contact us to receive a free, no-obligation estimate of the value of your business.
The best time to sell your business is when your revenues and profits have been trending upward for the last three years. Because buyers and their lenders use historic earnings and historic growth rates to project a company’s future earnings, this trend will help you command the highest possible value. Companies with flat or declining revenue and/or earnings are also saleable, albeit at a lower valuation than a company that is growing nicely.
Contact us to discuss your options and get a free, no-obligation market assessment of your business.
Unlike most business brokers, we customize the sales process for each client based on that client’s company, the types of buyers that are most likely to be interested, and the owner’s personal preferences.
For example, for smaller companies or in cases where an individual is the most likely buyer, we recommend going to market with an asking price. For larger companies, where sophisticated, private equity groups are the most likely buyer, we recommend going to market without an asking price.
To learn more about the process we would recommend for your company, please give us a call.
The length of the sales process depends on a lot of different variables, like the industry you’re in, the size of your company, your trends in revenue and earnings, and your asking price. If your company is in an attractive industry, is doing well and is priced right the process can take as little as 6 months. But, to be conservative, we recommend clients plan on the process taking 12 months from start to finish. That way, if the sales process takes less time, you’ll be pleasantly surprised.
We charge a small retainer plus a success fee based on the purchase price you receive for your business.
Retainers range between $1,500 and $15,000 depending on the size of your company, the complexity of the transaction, and the sell-side process you would like us to implement for you.
Likewise, our success fees depend on the size of the transaction. Because it takes more time to sell a small company than a large one, the percentage of the purchase price goes up as the size of the transaction goes down. For example, if your company has an estimated market value of $2.5 million, our success fee would be around 6%. If your company has an estimated market value of $25 million, our success fee would be around 2.5%.
To understand your options and get a better idea of our fees, please contact us.
