Are you contemplating the sale of your company?  What are the key attributes you should look for in your transaction team?  The sale and transfer of a privately held business is complex and can be stressful and emotional as well.  As the business owner, you have poured your life and soul into trying to make your business successful, taking time away from friends, family and personal pursuits.  So when it comes time for you to move on to the next chapter of your life, you may be worried exactly how and what steps to take, or how to get the best deal for yourself and for your employees.

Most business owners have never sold a business before and are not sure what to ask when researching brokers.  The following questions should be asked of all candidates:

• Can you determine if I’m ready to sell…if so, how will you do so?
• How will you value my business?  Would you order a business valuation or is it just an educated guess?
• Will you advise me of tax implications of the sale?
• Will you screen buyers for financial and operational fit or would I have to deal with tire-kickers?
• Will you maintain my confidentiality?
• Will you help me determine if my business is bankable?
• Will you provide a technically written confidential Offering Memorandum?
• Would you help me through due diligence, or am I on my own?
• Will you negotiate and structure the deal, or do I have to pay an attorney to do so?

Wondering what the best way is to proceed with business valuation?

Unlike business brokers, Trinity Transaction Advisory, LLC, will help manage all of these critical issues with a team of professionals at each corner, as opposed to deploying one sole practitioner.  The result is a well-planned, well-managed process with no surprises, producing higher values to our clients.  You should see what our clients are saying:  www.trinitytransactions.com/Testimonials.

The post What are you looking for in a broker? appeared first on Trinity Transactions Advisory, LLC.

Selling a business could be both challenging and gut-wrenching at times, however, being prepared can help ease the process.  The following are a few issues to consider when selling a business as they pertain to tax issues from a business transfer.

Stock vs. Asset – Depending on how your business is organized, the framework of the transfer you negotiate with your buyer could be critical.  Should I sell the stock or the assets?  Each formation, whether it is a C-Corp, S-Corp, LLC, or Partnership, possess different tax treatment upon the sale.  The way your company is organized may affect the way you are taxed either at the corporate level or individual level and also may determine depreciation recapture.  Knowing how to negotiate and structure around these issues could make a difference in up to 30% or higher in your total net proceeds.

Allocation of the Sales Price – The allocation of sales price will determine how the proceeds are taxed under an asset sale.  There is an inverse relationship between how the buyer and seller want the allocation.  How much of the final sales price should be allocated to consulting agreements, non-competes, fixed assets, intangible assets, and other assets are a factor of how experienced and knowledgeable of a negotiator you have on your team.

Installment Considerations – Are there any installment sale considerations?  Should there be?  Depending on your personal tax situation and any impending tax legislation on the horizon, an installment option may need to be considered as a tax mitigation strategy.  An experienced and knowledgeable negotiation can help in this situation.

There are too many other tax issues to consider when selling a business, but our experienced team of advisers can help you, not only advising, but negotiating between the parties.  Unfortunately, most business brokers never consider the tax implications, leaving it up to the seller’s accountant to handle after the sale; when it’s too late to turn back the clock.  Contact Trinity today to for a Free Feasibility Analysis of your business to determine if you are ready to go-to-market.

Curious if now is a good time to sell your business?

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Failing to prepare for an exit is one of the most common mistakes business owners make. Exit planning should begin on day one. Your exit plan will inevitably change over time. So be prepared to revisit it just as frequently as you revisit other business plans. The following steps can help you prepare your business for a successful exit. Many owners fail to develop an exit plan for their small business, which is a huge mistake. You should develop an exit plan for your business right from the very beginning.

Source Buyers 

What does the ideal buyer for your business look like? Don’t assume someone will magically appear one day looking to make a purchase. Just a quarter of salable companies actually sell. So maintain an ongoing and evolving list of potential buyers—competitors, strategic partners, and buyers who have previously approached you. Maintain relationships with these potential buyers, and be prepared to talk to them when it’s time to leave.

Create Recurring Revenue Streams

The amount of revenue you have is a major predictor of value. Buyers are risk-averse, and want to see easy streams of revenue. Automatic billing, subscription services, and monthly renewals keep customers—and revenues—coming back. So consider what you can do to build these recurring sources of money.

Standardize Your Operations

Strong businesses can continue operating even without their owners. That’s where standard operating procedures come into play. You must standardize operations. Focus on:

• Executive strategy
• Vision, mission, and core values
• Marketing plan
• Management practices
• Sales procedures and plan
• Operating processes and procedures
• Employee and staff management policies

Focus on the Right Growth 

It’s normal for growth to dip from time to time. Ultimately, what buyers want to see is growth over time. Erratic swings can scare them off, so be mindful of how these swings may look if you’re planning major change or growth.

Offer Something Proprietary 

Buyers want to invest in a business that offers something they cannot get elsewhere. Patents are useful (though not necessary), as are other forms of intellectual property. Even something as simple as a unique process or novel and effective management style can be a big selling point. So be prepared to set yourself apart, and to show that your unique way of doing things plays a key role in your success.

Well-Tended Books 

Good bookkeeping reflects a well-run business. No company gets acquired without clear, well-kept books. Maintain excellent, clear records. If you can’t do it on your own, outsource the task to a respected accounting or bookkeeping company. Regular audits lend credibility to your books, so don’t neglect this key task.

Not Owner-Dependent

Your business is like your child. And like children, businesses do not thrive when they have a helicopter parent. You’re the leader, not the person who should oversee daily operations. Businesses that are totally owner dependent are less enticing because they present significant risk. So work yourself out of a job and watch value increase.

A Solid Management Team 

A dedicated and skilled management team is key to making your business less dependent on you. You need a management team who understands the ins and outs of running your business, and who is committed to quality, efficient, daily operations.

Establish good contracts that encourage managers to stay. And don’t forget to nurture success in employees who may one day become managers. Competitive pay and benefits, a strong company culture, and a supportive management style can ensure your team is highly skilled, and will remain with the business even if you leave.

The post Eight Exit Planning Steps to Prepare Your Business appeared first on Trinity Transactions Advisory, LLC.