Companies represented by an investment banker like Jackim Woods & Co sell on average for a 15% premium over businesses sold by an owner without our assistance. Even more importantly, businesses that we represent have a 50% greater chance of closing.
So work with us and maximize the value of your company.
Here are answers to some of the most common questions we get from business owners.
Most businesses are valued based on the free cash flow they are likely to generate for a buyer or future owner. There are three key inputs to determine the value of your company; 1) its EBITDA or free cash flow, 2) its growth rate over the last three to five years, and 3) the current rate of return on capital that buyers are looking for in the private markets. 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 your business, the types of buyers that are most likely to be interested, and your 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 and marketing your business using business-for-sale websites.
For larger companies, where sophisticated, private equity groups are the most likely buyer, we recommend going to market without an asking price and having us contact each potential buyer directly to pitch the deal and explore their interest level.
To learn more about the process we would recommend for your business, please give us a call.
The time it takes to sell a private business depends on a lot of variables, like the industry you’re in, the size of your company, your revenue and earnings trends, 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 $20,000 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 $1 million, our success fee would be around 8%. If your company has an estimated market value of $25 million, our success fee would be around 3%.
If you’re thinking of selling your business, please contact us for a free, confidential, no-obligation conversation about your options.
To understand your options and get a better idea of our fees, please contact us.
If you are thinking of selling your business, please contact us for a free, confidential, no-obligation consultation to understand your options.
