By Aiden ArmstrongIn recent reports, the state of Minnesota is the home of over 100,000 businesses. A combination of an aging workforce and technology innovation will see one in every two U.S. businesses change hands. So what does that mean for you and your business? It’s not always as easy as putting a sign-out that says business for sale. Minneapolis hosts many business owners, and has brokerage firms that specialize in the sale of businesses.
Health Check-Up
The first step is a valuation of your company. A valuation determines the overall financial health of your business. Have you consulted with a financial advisor or with your tax person? Developing a plan to prepare your company for a sale, merger, divestiture or maybe franchising is a proposition that takes time. A valuation provides a very clear financial snap shot by identifying the company’s assets, liabilities, and current target market.
Today is the Day
Consider a professional licensed brokerage firm. Brokers serve as confidential intermediaries and are your partner in determining the best course of action to maximize your net return. It’s not about the dollar amount of the sale, but what you get from the sales transaction. A broker starts with a company valuation to determine the financial health and identifies value drivers that will engage buyers to act. Confidentiality is a must and brokers develop a blind company profile to market your business to C-level buyers. This process ensures that sensitive financial and proprietary information does not land in the hands of your competitors. Brokers receive and evaluate buyers’ offers on your behalf. It also keeps employees and vendors focused on the work and not on finding a new job. Some of the value drivers that engage buyers in pursuing a business for sale include:
* Buy vs. Build
* Access to immediate cash flow:
o Pay off the debt
o Pay the new owner a salary or ROI
o Use remaining cash for growth
* Equipment and Facility
* Trained Staff
* Intellectual Property
If your business is heavily dependent on you, brokerage firms provide merger and acquisitions (M&A) professionals that will map out an exit plan strategy. They will address:
* Financial Goal Analysis
* Situation Analysis
* Develop Action Plan
Don’t Put It off Another Day
Time continues to move forward. So why delay the opportunity to plan your exit. The biggest decision of your career should not be met with a forced exit. The Minneapolis market benefits from companies that generate jobs, products and services that support the community.
