By Shelby Schagrin, Managing Director – Investment Banking
Successfully selling a mid-sized business is often as challenging as owning and running the business. For business owners, a successful sale requires careful reflection, professional assistance, and an understanding of what to expect during the transaction process.
Here are some of the key elements to consider when exiting the business, with a focus on selling:
Is there an optimal time to exit?
To maximize value, the optimal time to consider a sale is when the business is growing, improving margins and has a positive future. Unfortunately, business owners sometimes consider selling when the business is in decline or when there are negative personal triggers. Market conditions also matter and, fortunately, it is currently a very strong sellers’ market.
- Professional Assistance
Does the business owner need assistance to sell the business?
Professional assistance is a critical element in executing a successful sale. Selling a business is a full time undertaking, and experienced investment banking professionals are essential to lead the process. The business owner needs to focus their time and energy on running the business.
What can the owner expect to get for the business?
Value is driven by three major considerations: the business, the industry and the market. The strengths and growth prospects of the business and the level of activity in the industry are important elements in determining value. In addition, market conditions can have a significant influence on value. Obtaining a professional valuation of the business from an investment banker is an important step before a business owner begins the selling process.
- Transaction Process and Closing the Deal
What steps are involved in selling the business?
Understanding how long the selling process generally takes, as well as the multiple steps involved, will help the owner in planning for the sale of a business.
In summary, the selling of a middle market business is a complex process that requires time, talent and experience to manage. There are many ups and downs along the way, and the stakes are high. A successful sale can be a rewarding process that can truly have a transformational outcome.
The Investment Banking department of Benjamin F. Edwards & Co. specializes in selling middle-market companies. Contact your financial consultant to learn more about the services available for business owners.