Crafting Your Business Legacy: How to Sell a Business

adamnoble business valuation meeting

I. Introduction

The decision to exit a business is one of the most difficult choices an entrepreneur will make. Beyond securing your financial future, a successful exit preserves your business’ legacy and allows you and your family to transition smoothly into the next chapter of life.

As experts in mergers, acquisitions, and business valuations; Adam Noble Group understands both the significance and complexity inherent in selling a company. For three decades, we have advised business owners through every aspect of a transaction: from initial goal-setting and preparation, to marketing, deal negotiation, closing, ownership transfer and post-closing transition. Our discreet, confidential approach aims to secure maximum value for our clients while building trust with potential acquirers.

II. Building Confidentiality, Trust and Rapport

Confidentiality is paramount when selling a business. News of a potential sale spreading prematurely can undermine negotiations, create uncertainty for employees and customers, and erode company value. Confidentiality must be maintained by the entire team including lawyers, accountants, bankers, stakeholders, and vendors.

Experienced M&A advisors recognize trust and rapport as the cornerstones of a successful deal. Acquirers invest significant capital into new ventures, taking on inherent risk for future cash flows. They must believe in the credibility of both the seller and the information provided about the business.

Adam Noble Group devotes substantial time upfront to understanding and aligning the M&A process with client values and goals for the transaction. This deep understanding allows us to correctly position the business with potential buyers. Our three decade track record of successful closed transactions and connections with strategic investors accelerate trust-building between all parties.

III. The Cornerstones of a Successful Business Sale

While business exits demand utmost discretion and confidentiality, following a clear, methodical process is equally vital. In order to understand how to sell a business quickly,  let’s break selling a company into five key phases typically spanning 6-12 months.  NOTE:  if the two initial phases identify exit-planning opportunities to materially increase the value of the business, total time might span 2-5 years.

  1. Initial Consultation and Goal-Setting

Before bringing a business to market, strategic advisors help owners clarify their priorities and desired timeline for exiting. Realistic valuation ranges are discussed along with deal structures that help balance tax implications with other objectives.  Because the owners’ business may be their most significant asset, additional lifestyle and financial planning may also occur at this stage.

  1. Valuation and How To Sell a business

How to sell a business, to maximize value, sellers should run targeted diagnostics on their company first. These include assessing growth opportunities, building infrastructure, and tightening financials. M&A advisors use financial benchmarks, modelling, and comparative deals to determine valuation drivers for the company’s specific industry and business model. The goal is to create a competitive confidential sale process that achieves a business owner’s dream for their family’s next best life by confidentially exiting their business for the most important payday of their life.

  1. Identifying and Qualifying Potential Acquirers 

In-depth market research helps match ideal buyers to the seller’s vision for their company’s next chapter. Both strategic investors and private equity firms may be confidentially targeted depending on deal objectives. Advisors qualify those demonstrating serious interest, availability of funds, and cultural alignment. Information is released in a progressive manner, as a specific buyer demonstrates the best strategic fit.  A shortlist of best-positioned prospects proceeds to the next round.

  1. Negotiation and Deal Structuring

Structured negotiations allow conversations to occur efficiently between multiple motivated parties. Skilled M&A advisors keep discussions progressing while safeguarding the seller’s interests. Creative deal structuring facilitates agreement on price, payment terms, closing timeframes, and other contingencies.

  1. Closing the Deal and Transitioning Ownership

Meticulous planning facilitates due diligence (including financial, legal, environmental, customers, employees, …) and ensures the legal transfer and payment are finalized seamlessly. For the small percentage of deals that don’t close after a successful LOI, it is usually due to lack of preparation in prior phases. Equally as important is working with buyers on transition plans that retain key talent and preserve the essence of the brand. Sellers should exit gradually over 3-12 months.  Typically, sellers will transition (work) full-time for the first month after closing.

IV. Crafting Your Business Legacy 

While securing the best financial return for the owner is clearly important, exiting owners also value that their company’s culture will thrive under new leadership. Several considerations influence these decisions around legacy.

Firstly, healthy businesses usually reflect the seller’s passion in some way – whether through community roots, loyal customers, or engaged employees. Strategic buyers are often chosen specifically because they share these same values.

Secondly, there can be a need to involve trusted senior management/advisors during the transaction process. Consideration to how staff and stakeholders are on-boarded during major change processes is contextually important for sellers and new owners. A business founder’s exit must include transfer of the founder’s constructive knowledge.

Lastly, employees and customers must be reassured that pending changes aim to strengthen what already works well rather than overhauling current operations. All parties need to communicate that continuity of excellence is the transaction’s primary purpose. With careful exit planning, selling a business can be handled with a minimum of stress.

V. Tips for a Seamless Business Exit

First-time sellers should start purposefully preparing and positioning their company for a liquidity event three to five years before their desired exit date. In advance, assemble trusted advisors in banking, legal, accounting, finance and M&A, to craft a coordinated game plan based on your objectives. Be disciplined about regular meetings to track progress and modify the exit plan as goals are achieved.

Address administrative elements like financial recordkeeping early. Buyers will review the last 3-5 years of financials to assess historical performance. A seller should prepare for this by audit or improving these financial statements and tax filings accordingly. Implement robust HR policies documenting procedures, job descriptions, and benefits. This demonstrates that the business possesses operational maturity to buyers

Finally, connect with other business owners who have recently sold companies through industry associations, peer groups, or M&A advisors. Learning what issues they encountered removes some uncertainty about what to expect. Qualified M&A advisors may also provide recommendations.  Read more details in our guide to confidential exit planning.

VI. The Role of M&A Advisors 

While business brokers primarily assist with selling smaller Main Street companies, M&A advisors offer a full-service approach to strategic marketing and negotiating the sale of mid-market businesses.

M&A advisors deliver expertise that business owners rarely possess themselves, including intimate market knowledge across varied industries and geographies. Well-established firms have cultivated connections with private equity groups, family offices and strategic buyers over decades of previous deals. Leveraging these relationships and experience leads to accurate pricing and exit planning guidance.

Unlike the financial return focus of private equity owners, entrepreneur sellers also prioritize cultural continuity and their team’s welfare when exiting. M&A advisors align the sellers’ wide-ranging interests to save clients time and money in the long run. Advisors actively coordinate with other transaction professionals to minimize complications that delay closing or devalue deals. Their comprehensive guidance also preplans for smooth transitions beyond the liquidity event.

VII. Conclusion  

Transitioning ownership signifies the closing of one productive season and the dawning of a new entrepreneurial horizon brimming with potential. Adam Noble Group congratulates you on this formidable milestone worthy of celebration. For three decades, , we have been advising and achieving business owners’ dreams of moving into the next best phase of life by exiting their businesses for the biggest paychecks of their lives with the buyer of their choice.

Whether you desire capital to fund a new venture or secure your family’s future; our team delivers. Discreet, honest and results-focused, we invite owners exploring their first or fifth liquidity event to schedule a free one-hour consultation this month to develop a customized plan. The initial process requires no long-term commitment and is completely confidential.

As trusted advisors, skilled negotiators, and astute project managers, we handle the intricate details at each phase while you focus on leading your business. We are dedicated to the legacy you have poured your talents into building thus far. We help business owners confidentially exit their business with the biggest paycheck of their life, guaranteed!  Let Adam Noble Group guide you confidentially and purposefully towards brighter future for you and your family.

For 3 decades, we have been helping business owners and their families move to the next best phase of their life by confidentially exiting their business to their choice of best buyer … and for the biggest and most important payday of their life.  Confidentially contact Us NOW to continue your journey!