Selling Your Business? How an Accountant From Owners Week Can Help
This article will explain what you can expect from your first call and if you decide to continue working with an accountant from the Owners Week network.
You have a number in mind what your business is worth, good keep that. Now the work starts.
Your number will be the starting point for this important and free consultation with a top Certified Public Accountant (CPA) who understands your industry. Remember there is no obligation tied to the consultation. This is a free opportunity to get credible feedback on how much your business is worth in today’s market.
Why find an accountant through Owners Week
Our accountants go through a rigorous screening to demonstrate expertise in selling small businesses like yours. The fact is that not any accountant can sell any sort of business for top dollar. You need someone who has closed a deal that looks like yours. Not to artificially increase the price, but to provide you key metrics and short term goals so your business is a standout value among other small businesses for sale.
Working with Owners Week you will gain the benefit of that comparable transaction along with solutions to increase the value of your business. From Owners Week, you have assurance of finding an advisor who has completed a transaction similar to yours and is willing to share with you that valuable context to help optimize the sale of your business. All of our accountants share these 4 objectives which earn them the designation of “sell-side advisors”
If you share these objectives, then you will benefit from speaking to someone who has gone through the sale process several times. As the accountant begins to learn about your business, the initial questions will be towards establishing what you own, what you owe, and what will be included in the sale. In the beginning stages, a model is built using your best estimates. Later on the accountant will dig in to establish a legal trail based on standard accounting practices. What will begin to develop even during your first call is a financial story that shows the trajectory of the business over time.
Moving Forward to Hiring your accountant
If you decide to move forward beyond the free consultation, subsequent meetings with your accountant will continue to improve the story of your business incorporating past earnings, cash flow, balance sheets, and equity statements. As these statements are built and verified you retain the full faith and credibility of the accounting firm your CPA belongs to. The credibility of your CPA will be invaluable when sharing information with buyers.
Whether you have a buyer in mind already or want to confidently welcome your first term sheet to buy your business, at this point it’s time to start thinking about an ideal structure for the sale.
The sooner an owner engages in value oriented discussion around exiting the business the more that owner can expect to gain from the sale. Poor planning will likely result in the buyer dictating the terms of the sale in their own favor. Based on the industry, the state of your business, and what’s happening in the overall market it will all have weight on identifying the most profitable deal structure.
For example, among professional service industries like law firms or insurance agencies, you might consider first a deal structure for an outright sale to a competitor. But what if the buyer proposes a deal that looks more like a merger of two similar companies? These alternate eventualities will result in very different proposals from the seller. One deal structure may require you to be more involved after the deal closes, whereas the other will afford more freedom for the seller to move on with few attachments.
Your conversation with a sell side CPA will explore and define these options for you. Other negotiable points that may keep you tied to the business will include liquidity ratios, escrow and earnouts. These terms usually come out when the buyer is trying to keep more value with the business and out of your pocket. A sell side CPA on your team will consider a wide range of financial implications whether you sell to a competitor or a new entrant. Your CPA advisor can also help put an appropriate price on your time if it will be a part of the ongoing business after the sale.