As business brokers, one of the most common questions we receive is, “What does your selling process look like?” While there are some common elements to every business sale, at Viking, we have developed a streamlined 7-step process that helps business owners not only complete the sale of their business, but also find the right buyer and earn top dollar during the process.
Our 7-Step Process for Selling a Business
1. Consultation and Valuation
Our process begins with a confidential introductory consultation that comes at no cost and with no obligation. This is an opportunity for our business brokers to learn more about you, your business, and what makes your business unique. This is also your opportunity to hear about what we do, how we do it, what it costs, and what you can expect throughout the selling process. Then, we will perform a confidential valuation (also at no cost and without obligation) to show you the range of your business’s value as well as a pre-screening with a lender to ensure your business meets current lending guidelines.
2. Strategic, Confidential Marketing
If you decide to move forward in the selling process and engage Viking, our team will begin gathering information and prepare a summary profile of your business. This manner of packaging the business for sale provides pertinent details of your business’s greatest differentiators and assets, but without disclosing any names or other sensitive details. Our brokerage team will use that package to market your business via multiple strategic channels as well as to our own network of qualified prospective buyers, all while protecting the confidentiality of you and your business. (Read this article for more information on why confidentiality is essential when selling a business.)
3. Buyer Pre-Screening
Inquiries will begin arriving from prospective buyers, and our team will begin the process of pre-screening those buyers. We pre-screen to ensure a buyer is not only serious but also financially capable of purchasing your business. Protecting your confidentiality remains a priority at this stage, and we do that by insisting prospective buyers sign a confidentiality or non-disclosure agreement (NDA). Next, your broker will meet the prospective buyer to educate them about the buying process. Finally, we will present any well qualified buyer to you for approval before we provide them any sensitive information (such as the name of your business).
4. Buyer/Seller Meeting
Next, you and your Viking representative will meet with the prospective buyer, giving you an opportunity to get to know them a bit and explain your business (and for the buyer to ask you questions as well). Normally the discussion at this meeting stays fairly high level, and in some cases a prospective buyer may wish to visit your office or see facilities or equipment. Many buyers will also wish to perform a more detailed review of your business’s financials after the meeting. These are all things our business brokers can assist you with, all while continuing to protect your privacy and ensure the highest level of confidentiality.
5. Offer Review and Negotiation
When a prospective buyer decides they want to buy your business, they will present a document called an “Offer for Purchase” or “Letter of Intent” that outlines the details of the offer. The offer will include much more than just a number. In addition to the offered purchase price, it will include the payment terms, any required employment agreement or non-compete agreements, the training and transition period, and any other business terms and conditions related to their offer. We will meet with you to explain and discuss the various components of the offer and provide our expert opinion and guidance to help you make the decision that is right for you. Ultimately, you will decide to accept the offer, reject the offer, or negotiate parts of the offer.
6. Due Diligence and Ongoing Marketing
After you accept an offer from a buyer, the due diligence period begins. This is the buyer’s opportunity to confirm that the business was accurately represented to them before they proceed to closing. Most buyers are checking for material differences or surprises that were unknown to them prior to submitting their offer, not just combing for minor discrepancies. However, the length of this period and level of detail can vary greatly, and this is generally dictated by the buyer. Our team will counsel you and assist wherever possible throughout this period.
Additionally, while most deals that reach due diligence proceed to closing, your business is not sold until the sale closes. So, while the prospective buyer performs their due diligence, we keep the sales pipeline open and continue collecting new inquiries.
Once due diligence is complete and buyer financing is secured, the next step is for our team to help you prepare for closing. Our team can recommend legal and financial counsel (attorneys and accountants), and your Viking intermediary will remain with you through the end of closing and even post-closing in case any last minute or post transaction questions or concerns arise, ensuring that you collect your funds and have all of the documentation you need when you leave the closing table.
We are confident in our selling process, and you can be too. Our closing rate is 3 times the industry average. That equates to more than 700 successful closings in the past 25 years. If you are selling a business, or considering selling a business, contact us today to schedule that first conversation. We are here to help.