
Guide To Selling Your Business & Building Your Transition Team
“I’m not ready to sell now. I’ve got several years left.” A key follow-up question to ask yourself is: “Is now the right time to sell?” As the Fed continues to raise rates to combat inflation and the risk of recession looms on the horizon, how will your business fair in this environment? We encourage you to consider these external factors when weighing whether or not this is the right time to sell.
Hopefully you’ve read PGP Advisory’s article, “What to Expect When You’re Ready To Sell,” which highlights the preparation timeline and how to set realistic goals for the process.
The team at PGP Advisory has formed a step-by-step guide to ensure businesses are sold at the right time, for the right price, and to the right buyer.
Step 1: Be Informed
Do your research and educate yourself on the selling process. Consult with an M&A advisor.
An M&A advisor will help you establish a strategy tailored to your business and manage the complexities of the sale process so that you can stay focused on running your business. They’ll identify and qualify buyers, secure an offer(s), and negotiate the eventual sale with the best possible terms.
If you’re invested in selling your business for the best possible value, choose a leading M&A advisory firm to broker the deal.
Step 2: Get Your Finances in Order
Purchase price is important, but so are the terms on the deal. Accurate financials can make the difference between getting 80-90% of the purchase price at close (via bank financing) and you becoming the bank (in the form of seller financing) for a significant portion of the purchase price over several years.
Do your due diligence by organizing your bookkeeping and financials and getting ahead of items that could prevent bank financing or slow down the sale (such as sign-off from other shareholders or active lawsuits or legal proceedings).
Consider your business’ employee contracts, intellectual property issues, and federal and state tax requirements. To ensure you have time to fix all potential red flags, hire a third-party accounting firm to assess your financial statements and advise on an exit-friendly tax strategy a year or two before the sale.
Step 3: Get a Business Valuation
Turn to experts (e.g., business brokers, M&A advisors) to understand how much your company is worth and to whom. Value is more than a number on a paper. The value that matters is what a buyer is willing to pay for your business. A trusted advisor will help establish a range that you would expect a reasonable buyer to offer for the business.
Step 4: Build Your Transition Team
“Great things in business are never done by one person, they’re done by a team of people.” – Steve Jobs. Putting together a team early can prevent a lot of stumbling down the road. Here is our list of professionals that business owners should have on their team (before your business goes to market) to smoothly and successfully sell their business:
1) M&A Advisor – Expert on sale strategy and process
2) CPA – Expert on your financials and tax strategies
3) Lawyer – Expert on identifying and managing legal risks with both the business and sale
4) Financial Advisor – Expert on planning for post-sale impact on your overall financial objectives
Summary
As experienced M&A Advisors, we are at the center of your business sale transition team. If the issues are not unaddressed, you will spend valuable time and resources prior to and after the sale trying to “fix” things. Your business is likely your most valuable asset, and building a successful company can take years of time and effort. If you’re considering selling your business at some point, schedule some time to discuss how we can help you make an informed decision – and maximize the price you receive for the sale.

Thinking Of Selling Your Business? Start Here.
What to Expect When You’re Ready To Sell
There are several reasons small business owners decide to sell their companies — they want to move to another city or state, sales are down, they’re looking for a new challenge or it’s time to retire.
The prospect of selling your business can feel overwhelming, and you want to receive a fair price for the assets you’ve worked so hard to create. To make the process as easy and profitable as possible, you’ll want to start planning early. Whatever the reason, once you decide to sell, you can’t just hang up a “for sale” sign and wait for the offers to come rolling in. Selling for the right price takes time and preparation.
What’s Your Goal in Selling?
Owners often focus primarily on the question “How much can I get for my business?” However, the first question an owner needs to be prepared to answer is, “What results do I want to get from this transaction?” Business owners will typically focus on what they think their business is worth or how much a peer recently sold their business for, even if that business was in a different industry.
PGP Advisory suggests focusing on the owner’s personal needs and goals. For example, consider these questions:
- Do you want to transition the company to the next generation of your family or to employees?
- Is your goal to find a willing buyer in the open market and maximize the sale price?
- Do you plan to retire and live off of the proceeds from the sale for the rest of your life?
- Are you looking to invest some of your equity with the buyer and work with/for the next owner?
- Are you looking to reinvest in a different opportunity?
- What other goals do you have (e.g., paying for college educations, contributing planned amounts to charity)?
Understanding the Realistic Timeline is Essential
In an ideal situation, the questions above would be asked and answered several years before the owner wants to take their business to market. This timeframe would allow for appropriate estate and investment planning. Plus, having a longer timeframe allows owners and their advisors to consider what actions can be taken to increase the value of the company before going to market and leaves ample time for implementation.
Having time on your side can really pay off when selling a business. Whether you’re ready to retire or simply want to move on to a new venture, it’s imperative to keep in mind, that the completion of a sale can take well over a year, so keep that in mind as you plan your exit strategy.
At PGP Advisory, we explain to our clients that it’s reasonable to prepare for this to be a 2-year process, roughly from the time you decide to sell, all the way to the completion of the sale. Wrapping your head around this realistic time frame is a necessary first step. This critical preparation will help you to improve your financial records, business structure, and customer base to make the business more profitable. These improvements will also ease the transition for the buyer and keep the business running smoothly.
Selling a business requires an enormous amount of planning. As you begin the process, it’s important to focus on the step you’re in and the long-term objective. Otherwise, you may end up making short-term decisions that go against your ultimate plan.
Takeaways
Knowing what you want/need as a result of the sale and understanding the realistic selling timeframe, will set you up as much as possible for a smooth and successful transaction.
In our next segment, PGP Advisory will walk you through the first steps owners will want to take to begin the selling process from an advisor perspective, including helping you construct your transition team.
Read More
Why Your Business Should ALWAYS Be Ready To Sell
Whether you have exit strategies in place or you plan to operate your business for a long period of time, as an entrepreneur, you should always be ready to sell your business. Many owners of private businesses fail to recognize the importance of running their companies in a way that ensures they are fully prepared should the need to sell arise.
Based off experience helping countless business owners reposition and restructure their businesses, PGP Advisory always encourages clients to the adopt the prepared mindset of ‘always be ready to sell,’ even if they have no intention of selling. Our goal today is to demonstrate how always being ready to sell will position your company for success regardless of where you are on your business journey.
Be The Buyer
Let’s begin by placing ourselves in the position of a prospective investor. A savvy business investor will want to see a well-oiled, automated, documented, efficient, and streamlined machine when they look under the hood.
Potential buyers almost always can see through a rushed attempt to make a business seem as though it’s running at its full potential. Failing to put solid financial systems in place or to make sure key management team members are fully capable of leading when you’re not around is like waiting until the week before your child graduates from high school to research college admissions requirements. Simply put, it’s too late.
Most sellers do not consider buyer needs until a sale is imminent, which often results in them scrambling to make changes or accepting a reduced sale price.
Prepare to Sell, Even If You Don’t
Ready to sell, does not mean your business has to be on the market. It means that if a sale arose, or circumstances change, your business will immediately be more attractive to buyers. The intention here is that by being ready to transition to a new owner, putting solid systems in place, employing great staff and reducing reliance on the you as an owner, will inevitably ensure you get the best price when it is time to sell. This also means that it becomes easier to run your business and you can spend more time working on your business instead of in it. At times, forces beyond our control (e.g. COVID-19, economic recessions, difficulty accessing capital, rising rates, etc.) may affect the timing of your decision. Many sellers took advantage of the premium paid by buyers in the seller’s market for businesses over the past few years. It pays “literally” to consider exiting when there is strong demand and favorable conditions for acquiring businesses.
How to Get Started
PGP Advisory suggests beginning the process with properly setting up your business’ documentation. Are your company’s leases and agreements current, secure and available? Insider Tip – Whenever you renegotiate your lease agreement, consider asking the landlord to agree to subordinate if you (or a buyer) decide to seek bank financing. Be sure your business’ financials are in order, are your Profit and Loss Statements, Balance Sheets, and tax returns accurate, easily accessible, and showing positive trends? We also recommend giving serious thought to your company’s systems and procedures- do you have an operational playbook? Take a look at your role within your company and reduce the need for you to be involved on a daily basis as you can delegate to adequate and well-trained staff.
Takeaways
Owners who adopt a prepared mindset receive the dual benefit of a business with higher value to any external buyer, as well as enhanced profits regardless of whether a sale ever occurs. Being ready for a sale, means making your business more attractive to an outside investor and means your business is more prepared for any eventuality outside of your control that may force you into sale. These tips will help you keep your operations in excellent shape, and they will help your company be more nimble and adaptive to change with a stronger foundation to stand on.
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PGP Advisory’s Software Implementation Client- Westward Consulting- Completes Sale
PGP Advisory, a leading mergers and acquisition advisory practice and San Antonio business broker, is pleased to announce that it served as the exclusive M&A advisor to Westward Consulting LLC, a strategic Ultimate Kronos Group workforce software implementation partner, in its sale to Mosaic Consulting Group on July 1. With this acquisition, Mosaic Consulting Group, a long-time Ultimate Software partner focused on human capital management (HCM) support and service, is adding Westward Consulting’s Kronos experience and focus on workforce management, to their services.
“We worked with John West, Founder and CEO of Westward, over the past few years to prepare his company for this significant milestone. The cultural fit of the combined organization paired with enhanced solutions offerings into the marketplace position Mosaic to create and deliver increased value to its clients, employees, and partners.” Jason Brown, Managing Partner, PGP Advisory
John West, Westward CEO adds, “This is an exciting time. Two best-in-class teams are coming together to offer a full suite of services to our clients. Now, we will be able to help our clients seamlessly optimize and hone their team related strategy, processes and technologies”
Westward Consulting was founded in 2015 as a workforce consulting company with a mission that guides organizations to exceptional workforce performance. The Westward team exemplifies their team’s values: Family, Ethical, Fun and Generous. They deliver an exceptional client experience by focusing on thinking outside the box. Finding innovative solutions for their clients is at their core.
About PGP Advisory
PGP Advisory is a M&A advisory firm that helps our clients create value in the transaction process by offering Fortune 500 experience, tools, and strategies to small and midsized businesses. We seek out, identify, and solve problems for our clients throughout the entire transaction process. We leverage both our deal and operational expertise and experience to support our clients’ desired deal outcomes.

Turn to the Professionals for Best Results

There is a direct relationship between the asking price and the amount of cash on the table at the time of the sale. Buyers and sellers alike should keep one fact in mind. Most businesses involve some level of seller financing. It is customary for both buyers and sellers to have concerns regarding this kind of financing; after all, sellers don’t want to take their businesses back from the buyer. Buyers want to generate enough money to help the business thrive and make a living. One proven way to ensure the successful sale of a business is to turn to the experts.
Screen out Window Shoppers
The simple and very established fact is that when you choose to work with the professionals, it can streamline the entire sales process. Business owners are typically very busy people. That means they don’t have time to waste with window shoppers. They also don’t want to divulge confidential information to parties that don’t possess the means to actually follow through with a successful sale.
Business brokers and M&A advisors know that most prospective buyers are just dreamers or will ultimately fail to qualify. When you work with the professionals, it means that you have a shield to protect you and your valuable time. Experienced brokers have a range of techniques that screen out unqualified candidates and match you with buyers who are the best fit.
Maintain Confidentiality
Anyone who has ever sold a business, or even contemplated selling a business, knows all too well that confidentiality is of the utmost importance. Sellers need to know that the information they reveal will not spill out all over the web. Brokers are experts maintaining confidentiality and impressing upon prospective buyers the tremendous importance of honoring the agreements they sign.
It is important to note that leaks regarding the sale of a business can cause a range of often unexpected problems. Key employees may get nervous about their future prospects and begin looking for a new job, competitors may begin attempting to poach employees, or customers and key suppliers may get nervous and turn to your competitors. In short, serious buyers and sellers alike benefit from maintaining confidentiality.
Matching the right seller with the right buyer is truly an art and a science. Many factors are involved ranging from financing to psychology. When the right match is made, then it is possible to move through the process of seller financing more quickly and with fewer roadblocks or complications. Working with a business broker or M&A advisor is the single most important step that any buyer or seller can make to help ensure that seller financing, and in fact the entire sales process, progresses as smoothly as possible.
Copyright:Business Brokerage Press, Inc.
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