Page 9 - B2B Spring19

SELLING YOUR BUSINESS
BY DAWN ZEHR
Selling a business is a complex process to maneuver, and Randall Green, a certi ed commercial real estate broker in Helena, shares insights from his considerable experience. A crucial rst step for a business owner who is preparing to sell his business
is to retain the services of both an accountant and an attorney, in order to determine the most accurate value of the business. A business’s two biggest expenses, according to Randall, are
its rent or mortgage, and its employee wages. It is necessary to evaluate these expenses as the owner prepares for the sale of the business. Improving
net cash ow is the highest priority for an owner, in order to ensure that there are substantial nancial bene ts for a potential buyer. An owner should look at the transaction with the scrutiny of a buyer, starting with the bottom line and then evaluate the
economic conditions now, and how they may look into the near future.
He should consider factors such as
net operating income, how to manage debt, the business’s location, whether there is real estate involved in the sale, any franchise a liations, and the employees who currently work for the business. If the business is a service provider, he should take into account whether its reputation is built on the personality and customer service of its current owner and employees, since customers can be exceedingly loyal to a business that provides exceptional customer service. Will customers remain loyal to a new owner?
An exit strategy is vital for the business owner. He should consider his successor and rst look from within: is there a dedicated employee or a family member who might wish to buy the business? Once the business
changes hands, is the seller willing
to stay on and consult with the new owner for a short time? If the property is leased, a seller should nd out if the landlord will extend the lease to a new owner, and if there will be any changes in the terms of the lease. Another factor to consider is debt, and how the seller will retire any debt prior to the sale. Financing is another key factor; an established long-term relationship with a banker bene ts a business tremendously. A seller can choose to offer nancing to a buyer, but should be aware of the risks involved with
this option. Ideally, a business owner would work alongside a business broker to move through this process, since it is littered with potential complications and pitfalls, and each business brings its own unique circumstances to the equation. ■
SPRING 2019 | 9
Business FOR SALE