• You should hire an attorney and a CPA
• Serious want and respect serious sellers and vice versa
• Clearly define rules for due diligence, don’t rush into due diligence.
• Your biggest job selling is selling your business.
• A professional valuation doesn’t hold a lot of meaning (most of the time). It’s how you present the valuation and make the buyer feel comfortable taking over your asset. Structure is everything.
• Selling to key employees is usually the best option for obtaining the highest sales price on your business. Not always, but most of the time structuring a buyout over time can earn you more than if you brought your business to the market.
• Multiples on “active” valuations are highly subjective and most of the time pointless. Putting a multiple on a valuation where the new owner has to work full time is very subjective with no real basis. Multiples are earned on assets that can yield a certain amount of cash flow (passive) for the investor. They vary depending on industry an risk. A multiple for an intesive owner operator business is highly subjective with no real basis.