“Buyers are much better at buying businesses, then sellers are at selling”, author unknown.
Don’t let a buyer push you to sell for a low sales price based upon a multiple of the last few years. This will never get you the highest possible sales price. See what we can do for you.
Don’t sell your business based upon the “profits of the past” …sell the future potential. Simply put, you need to showcase all the reasons why the business has not performed well in recent years. This is exactly what we try to do at CBG.
We strongly believe it is foolhardy to establish the value of a business based upon a multiple of earnings. We have sold hundreds of business for a sales price substantially above a multiple of the past earnings.
In short, the highest possible value of a business will happen when you find that 1 buyer that sees to upside potential/growth of your business. Almost any business can be sold for some level of value, the trick is to find that 1 buyer that will pay the highest price who truly “gets it”, who sees the business NOT for what it made over the past 3-5years, but INSTEAD for what it could have made had the current owner done things differently.
Also, the broker needs to work closely with the seller to collect all the ideas or improvements that need to be in place to get the business to the next level. Maybe all the business needs are new energy or working capital and the current owner is financially tapped out and/or burned out. Once the buyer fully understands what the business “can be” going forward after these new ideas are implemented and renewed energy from the new owner is in place, then, buyers will always pay a substantial premium.
We use a very sophisticated method to quietly and privately bring to a given buyer all this to get them excited and willing to pay the seller a premium. We are experts at painting a mental picture in the buyer’s mind about what life would be like after the purchaser has bought the business and implemented all your suggested ideas to improve the business going forward. We do this through Video, a comprehensive write-up as well as detailed financial projections of the next 3-5 years after all the changes are installed and the business has a fresh new head of steam.
Remember, CBG and the seller’s interest are directly aligned to maximize the sales price because the more the seller gets, the more CBG gets.
More specifically, you need to be able to paint a picture in the buyer’s mind about what life would be like after the purchaser has bought the business and implemented all your suggested ideas to improve the business going forward. You need to be able to get a buyer excited about, not what the business has been making for the last 5-10 years for you, but instead, what it could have been making if the right decisions were made in the past. Also, it’s great to show what the gross sales and cash flow would have been if the right energy were there in the past, and if it were properly capitalized or had enough money to.
Finding this perfect buyer can be hard, but it’s worth the effort since it will always result in the biggest sales price possible.