The Art of Selling a Business With $10 Million to $100 Million in Revenue
Written by Jacob Orosz, President of Morgan & Westfield
For a business to sell for what it’s really worth – or even more – you need to properly prepare. But too many entrepreneurs put off planning the sale of their business until the last moment. Acquired – The Art of Selling a Business With $10 Million to $100 Million in Revenue will help you prepare your business for sale and walk you through the sales process, dodging the pitfalls along the way. With a significant amount of your wealth tied up in your business, planning your exit is one of the most critical initiatives you’ll undertake. Don’t go it alon
Before anything else, preparation is the key to success.
Alexander Graham Bell
What’s Covered in the Book
How to decide whether to sell your business
How to prepare your company before you go to market
A detailed analysis of why some businesses ultimately don’t sell and what you can do about it
An overview of your various exit options and which are most likely to maximize your proceeds
A framework for deciding whether to sell your business as a whole or in parts
Advice for raising growth capital from a private equity group to take your business to the next level
A thorough examination of the major factors buyers look for in middle-market businesses
How to normalize your financial statements to calculate EBITDA
Common EBITDA multiples for businesses in the middle market
An overview of the most important valuation concepts
More than 50 variables that can affect the value of your business
Insight into over 60 actions you can take to improve the value of your company
When and what to tell your employees
Advice on building your deal team
An outline of a typical strategic marketing plan to sell a mid-market business
The three main types of buyers in the middle market and what each looks for
How to handle management meetings with buyers
Tips on dealing with buyers
Tips for negotiating the letter of intent
An overview of the major financial and legal elements of a transaction’s structure
An explanation of the main terms of the purchase agreement
One day you’ll decide to sell your company. You dream of a simple transaction that leaves your employees happy, your buyer positioned for success, and your bank account bulging. Unfortunately, the reality is that the exit process is fraught with roadblocks and – even when successful – often leaves money on the table. The sale of your business will be one of the most stressful events in your life. Don’t get blindsided.
Whether you’re seeking general guidance or looking for specific, constructive descriptions of the sale process for mid-sized companies, this essential guide contains proven strategies that will significantly improve your odds of successfully selling your business. Written in a conversational tone, Acquired will provide you with sound advice based on time-tested results from my 20 years in the trenches selling businesses in a variety of industries. I wrote it specifically for owners of companies with revenue from $10 to $100 million – or companies with earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2 million to $10 million per year.
This book is different. Acquired isn’t about selling fast – it’s about selling smart. In these chapters, I offer recommendations that even the busiest entrepreneurs can apply in their hectic lives. And while this book speaks directly to sellers, anyone involved in the M&A process – buyers, attorneys, accountants, and business appraisers – will benefit from the observations and advice that’s included.
A successful entrepreneur may exit a handful of companies in their lifetime. Even that experience pales in comparison to corporate buyers who close deals all the time. Without decades of experience in mergers and acquisitions, sellers often don’t have the tools they need to get the best results for themselves, their teams, or the new parent company. The information in Acquired will help you level the playing field.
Much of the information available out there isn’t geared toward mid-sized businesses. The theoretical knowledge that’s out there is rarely applicable to actually selling a business. Acquired is specifically written for mid-size business owners. This book is loaded with useful, actionable tips and proven strategies on the art and science of selling a mid-sized company.
Acquired goes into detail about what happens behind the scenes when selling a middle-market business. In reading it, you will:
You’ll learn practical rules, strategies, and tactics before you get in the game and then discover how to effectively position your company to achieve your best possible exit. Acquired will give you a comprehensive insider’s look at mid-sized businesses and teach you how to apply those lessons to your sale. Are you ready for the roadmap that leads to your ultimate payday? Let’s go.
Questions Answered in This Book
How long does it take to sell a mid-market company?
How do I decide which value drivers to prioritize when preparing for the sale?
Why don’t some businesses sell?
How and when should I tell my employees I’m planning to sell?
How do I maximize the value of my company?
How do I keep the sale a secret from my employees, customers, and competitors?
What are the advantages and disadvantages of using a multiple to value my business?
How do I minimize the tax implications of the sale?
What are the most common methods to value mid-sized companies?
How do I structure the deal from a legal standpoint?
Do buyers commonly pay for potential?
Should I consider an earnout?
Who should I hire to appraise my business? How much do they charge?
How do I prepare for due diligence?
Table of Contents
Chapter 1: Exploring Your Exit Options
Chapter 2: Deciding to Double Down
Chapter 3: What Buyers Want
Chapter 4: EBITDA, EBITDA, EBITDA
Chapter 5: Valuation Multiples
Chapter 6: Valuation Theory
Chapter 7: Valuation Practice
Chapter 8: Value Drivers
Chapter 9: Improving Value
Chapter 10: Prioritizing Your Value Drivers
Chapter 11: Your Deal Team
Chapter 12: Your People Strategy
Chapter 13: Preparing the Information Memorandum
Chapter 14: Keeping the Sale a Secret
Chapter 15: Understanding and Finding Buyers
Chapter 16: Qualifying Buyers
Chapter 17: Management Meetings
Chapter 18: How to Negotiate with Buyers
Chapter 19: The Letter of Intent
Chapter 20: Deal Structure
Chapter 21: Due Diligence
Chapter 22: Purchase Agreement
Chapter 23: Closing
Appendix A: Glossary
Appendix B: Due Diligence Checklist
Appendix C: Purchase Agreement Clauses
Appendix D: List of Closing Documents
Appendix E: Escrow’s Duties
Appendix F: Recommended Reading
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