Table of Contents
Introduction
About This Book
Conventions Used in This Book
What You’re Not to Read
Foolish Assumptions
How This Book Is Organized
Part I: Getting Ready to Get Out
Part II: Packaging Your Business for a Sale
Part III: Launching and Navigating the Sale Process
Part IV: So You’ve Got a Buyer! Now What?
Part V: The Part of Tens
Icons Used in This Book
Where to Go from Here
Part I: Getting Ready to Get Out
Chapter 1: So You Want Out of Your Business? Your Options and the Process
The Various Ways to Sell Your Business: Yes, You Have Options!
Selling outright and being done with it
Selling but staying involved
A Helicopter View of the Business Sale Process
Step 1: Preparing your business for sale
Step 2: Assembling your business sale team
Step 3: Pricing your business
Step 4: Assembling sale materials
Step 5: Finding and working with buyer prospects
Step 6: Doing due diligence
Step 7: Structuring and negotiating the deal
Step 8: Closing the sale
The final step: Passing the baton
Putting Yourself through a Quick Pre-Sale Self-Assessment
Pinpointing your business-exit motivation
Weighing your priorities and setting objectives
Form on the CD-ROM
Chapter 2: Evaluating Your Business as a Sale Prospect
Assessing the Financial Health and Growth Prospects of Your Business
Charting your financial history
Assessing the financial condition of your business
Considering the Non-Financial Aspects of Your Business
Understanding the attributes most buyers seek
Weighing the strength of your business capabilities and processes
Assessing the transferability of your business
Analyzing the Health of Your Industry Sector and Overall Market
Gathering the facts and stats
Forecasting trends based on the info you gather
Watching Out for Risk Factors (Or Being Prepared to Account for Them)
Deciding How to Proceed
Forms on the CD-ROM
Chapter 3: Sprucing Up Your Business
Weighing Your Options
Untangling Legal Issues
Getting Your Finances in Order
Getting clear about your financial condition
Cleaning up financial problems
Increasing your bottom line
Improving Your Curb Appeal
Polishing your external impression points
Boosting your online presence
Fact-checking and fine-tuning your reputation
Overcoming Business Weaknesses and Building Business Strengths
Improving your business one capability at a time
Improving the transferability of your business
Accounting for Market Area and Industry Weaknesses
Chapter 4: Assembling Your Business Sale Team
Knowing Who’s Who on the Business Sale Team
Deciding Where You Need Help
Do you know what your business is worth?
Do you know who and where your likely buyers are?
Do you have time to both run your business and prepare it for sale?
Are you good at marketing, presenting, and negotiating?
Weighing the Benefits and Costs of Hiring a Broker
Signing Your Sale Team MVPs
Selecting an accountant and attorney
Bringing on a broker
Enlisting an appraiser
Forms on the CD-ROM
Part II: Packaging Your Business for a Sale
Chapter 5: Compiling Your Financial Records
Getting Your Bearings
Knowing what you need: A quick outline
Figuring out where to begin
Deciding Whether to Upgrade from Cash-Based to Accrual-Based Accounting
Preparing Financial Statements
The income statement
The cash flow statement
The statement of seller’s discretionary earnings
The balance sheet
Calculating Financial Trends and Ratios
Sales and expenses growth trends
Sales and earnings growth rate
Inventory turnover
Number of days in receivables
Current ratio
Assembling Backup Information
Forms on the CD-ROM
Chapter 6: Pricing Your Business
Making a List of the Information You Need
Getting Clear about What You’re Selling
Selling your business assets
Selling your business through an entity sale
Valuing Your Assets
Pricing your tangible assets
Valuing your intangible assets
Assessing the Comparable Market Value of Your Business
Gathering info from those in the know
Relying on market trends
Adjusting comparable market information to fit your business situation
Determining Your Earnings Multiple and Pricing Your Business
Forms on the CD-ROM
Chapter 7: Telling Your Business Story — Succinctly!
Strategizing Your Storytelling: Where to Invest Your Energy
Briefly Introducing Your Business
Introducing your business in 60 seconds or less
Shrinking your 60-second intro to a 20-word classified ad
Updating and Summarizing Your Business Plan
Creating a brief business plan (or shrinking your existing one)
Highlighting business strengths
Overcoming weaknesses and threats
Describing your business model
Updating and Summarizing Your Marketing Plan
Getting a glimpse of what you should include
Providing a picture of the market
Pinpointing your market position
Sharing your four-part marketing strategy
Stating your marketing budget
Presenting Your Employment and Operations Policies
Employment policy manual
Operations manual
Forms on the CD-ROM
Chapter 8: Preparing Your Selling Memorandum
Demystifying the Function and Form of a Selling Memorandum
The purpose
The basic blueprint
The summary
Tips for Making a Good First Impression
Compiling the Contents for Your Selling Memorandum
Cover
Table of contents
Summary of business and offer
Business description
Location
Operations
Product or service
Market environment
Future plans and projections
Financial information
Price and terms
Appendix
Trading Your Selling Memorandum for a Confidentiality Agreement
Forms on the CD-ROM
Part III: Launching and Navigating the Sale Process
Chapter 9: Planning and Launching Your Advertising Strategy
Considering Your Buyer Before Deciding Where to Advertise
Who’s your buyer?
What your buyer’s looking for
Where your buyer’s looking
Getting Familiar with Your Advertising Options
Taking advantage of the World Wide Web
Placing ads in newspapers and industry magazines
Writing Ads That Work
Watching your words
Requesting responses that help you pre-screen inquiries
Tracking Your Ad Responses
Form on the CD-ROM
Chapter 10: Screening and Communicating with Ad Respondents
Recognizing Typical Business-Sale Ad Respondents
Dreamers
Idle shoppers
Sleuths
Scavengers
Ready, able, and un-aimed buyers
Ready, able, and aimed buyers
Placing Respondents into Follow-Up Categories
Hot prospects
Warm prospects
Cold prospects
Responding to Hot Prospects
Calling to follow up
Meeting face to face
Scheduling a tour of your business
Confirming the Temperature of Warm Prospects
Form on the CD-ROM
Chapter 11: Steering the Pre-Purchase Process and Accepting a Buyer Offer
Preparing for the Buyer Tour and Your Business Presentation
Presenting Your Business
Meeting Privately for Q&A
Addressing the buyer’s questions confidently
Putting yourself in the interviewer’s shoes
Nudging the Conversation toward Decision-Making Time
Calming a buyer’s nerves
Discussing possible offer details
Getting an offer in writing
Reviewing the Letter of Intent for Acceptance or Counter offer
Accepting the Buyer’s Purchase Offer
Forms on the CD-ROM
Part IV: So You’ve Got a Buyer! Now What?
Chapter 12: The Investigation Begins: Due Diligence
Preparing Paperwork That Bares All to the Buyer
Taking Precautionary Measures Before Due Diligence Begins
The Buyer’s Homework Assignment
Verifying your business’s financial health
Researching your operations
Investigating legal issues that affect your business
Your Homework Assignment
Assessing the buyer’s financial ability
Researching the buyer’s management experience and reputation
Discovering the buyer’s plans for your business
Forms on the CD-ROM
Chapter 13: Structuring and Negotiating the Deal
Anatomy of a Sale Structure
Understanding the Fundamentals of a Seller’s Sale-Structure Strategy
Agreeing with the Buyer on What Exactly You’re Selling
From the seller’s point of view
From the buyer’s point of view
Setting the Final Sale Price
Allocating the Purchase Price
Cash
CDs, marketable securities, and foreign currency
Accounts receivable and debt instruments
Inventory
Tangible assets
Intangible assets, not including goodwill
Goodwill and going-concern value
Getting paid for intangible assets and goodwill
Studying the Payment Structure Menu
Cash payoff
Third-party financing
Stock exchange
Cash down plus a seller-financed note
Deferred payments: The earn-out deal
Navigating Negotiations
Preparing to negotiate
Hashing out the details of the negotiation
Chapter 14: Handling the Fine Print: Financing and Tax Specifics
Deciphering the Rules of SBA Loans
SBA-guaranteed loan requirements
Steps involved in obtaining an SBA-guaranteed loan
Becoming the Banker by Self-financing Your Sale
Obtaining a promissory note
Going a step further with a secured promissory note
Restricting stock share endorsements
Managing Your Sale Taxes
Understanding a bit about the Alternative Minimum Tax (AMT)
Gaining tax advantages with an installment sale
Completing the IRS Asset Acquisition Statement
Chapter 15: Closing the Sale
Clearing the Way for Closing Day
Knowing What to Expect: An Outline of the Closing Process
Closing in your attorney’s office
Closing with an escrow settlement
Drawing Up the Purchase and Sale Agreement
Who writes it
What’s in it
Finalizing the Deal: The Closing Ceremony
Post-Closing Housekeeping
Dissolving Your Business Entity
Ending Business Operations
Forms on the CD-ROM
Chapter 16: Announcing the Sale and Passing the Baton
Announcing the Sale to Your Employees
Your turn: Explaining the situation
The buyer’s turn: Establishing rapport and explaining future plans
Telling Customers and Business Associates
Sharing your news with key contacts
Spreading the word to everyone else in your business world
Making a phased announcement
Informing the Media
Seeing the Transition Period through to the End
Part V: The Part of Tens
Chapter 17: Ten Deal-Killers to Avoid
Setting Your Asking Price Too High
Neglecting to Get Your Business in Salable Shape
Lacking a Transition Plan
Having a Short or Non-Transferable Lease
Insisting on an All-Cash Sale
Covering Up Problems
Stretching the Truth
Taking Your Sweet Time When Communicating with Buyers
Waiting Too Long to Qualify the Buyer
Refusing to Negotiate
Chapter 18: Ten Business Marketplace Trends and Truths
The Number of Businesses for Sale Is Large and Growing
Business Size Affects Sale Success
Business Sales Take 5–12 Months on Average
Most Businesses Aren’t Ready for a Sale
Business Brokers Have the Highest Sale Success Rates
$250,000 Is the Median Asking Price
Most Sellers Are 55+
Most Shoppers Shop Online but Buy Locally
Most Shoppers Never Buy
All-Cash Deals Cost Time and Money
Chapter 19: Ten Things to Consider When Hiring a Broker
What Are the Broker’s Qualifications?
Does the Broker Have Good Web Presence?
What’s the Broker’s Recent Track Record?
How Does the Broker Market Listings?
What Do Recent Clients Have to Say about the Broker’s Performance?
What Does the Broker Charge?
How Does the Broker Price a Business?
Has the Broker Been Sued?
Will the Broker Agree to Carve Outs?
Will the Broker Assist You Even without a Listing?
Chapter 20: Ten Answers to Have Ready for Buyers
Why You’re Selling
What You Plan to Do after the Sale
How Much You Earn from the Business
Why Your Asking Price Is Reasonable
How Your Business Has Grown over Recent Years
How the Business Will Transfer and Run without You
Why Customers Will Remain Loyal
What Your Business Prospects Look Like
What Your Business Risks Look Like
What Payment Terms You’re Open To
Appendix: About the CD
Software
Chapter files
Links
Selling Your Business For Dummies
by Barbara Findlay Schenck
Foreword by John Davies
CEO, Sunbelt Business Brokers
Selling Your Business For Dummies®
Published by
Wiley Publishing, Inc.
111 River St.
Hoboken, NJ 07030-5774
www.wiley.com
Copyright © 2009 by Wiley Publishing, Inc., Indianapolis, Indiana
Published by Wiley Publishing, Inc., Indianapolis, Indiana
Published simultaneously in Canada
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600. Requests to the Publisher for permission should be addressed to the Legal Department, Wiley Publishing, Inc., 10475 Crosspoint Blvd., Indianapolis, IN 46256, 317-572-3447, fax 317-572-4355, or online at http://www.wiley.com/go/permissions
Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com, Making Everything Easier, and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission. All other trademarks are the property of their respective owners. Wiley Publishing, Inc., is not associated with any product or vendor mentioned in this book.
Limit of Liability/Disclaimer of Warranty: The publisher and the author make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation warranties of fitness for a particular purpose. No warranty may be created or extended by sales or promotional materials. The advice and strategies contained herein may not be suitable for every situation. This work is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If professional assistance is required, the services of a competent professional person should be sought. Neither the publisher nor the author shall be liable for damages arising herefrom. The fact that an organization or Website is referred to in this work as a citation and/or a potential source of further information does not mean that the author or the publisher endorses the information the organization or Website may provide or recommendations it may make. Further, readers should be aware that Internet Websites listed in this work may have changed or disappeared between when this work was written and when it is read.
For general information on our other products and services, please contact our Customer Care Department within the U.S. at 800-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002.
For technical support, please visit www.wiley.com/techsupport.
Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books.
Library of Congress Control Number: 2008937851
ISBN: 978-0-470-38189-2
Manufactured in the United States of America
10 9 8 7 6 5 4 3 2 1
About the Author
Barbara Findlay Schenck has spent more than 20 years helping businesses — especially small businesses — start, grow, market, and brand their companies.
Her career started in Honolulu, where she was director of admissions for a private college before joining the staff of Hawaii’s largest public relations firm. She and her husband, Peter, left Hawaii for an assignment with the Peace Corps in Malaysia before returning home to Oregon, where they started an advertising agency that ranked as one of the Northwest’s top 15 when they sold it in 1995.
Since then, Barbara has written a number of business books, including Small Business Marketing For Dummies, now in its second edition; the second
edition of Business Plans Kit For Dummies; and Branding For Dummies, which she coauthored in 2006 with help from branding expert Bill Chiaravalle.
Now, with Selling Your Business For Dummies, she guides entrepreneurs and retirement-ready small-business owners as they pursue the ultimate goal of a business sale. The book includes expert advice from John Davies, CEO of Sunbelt, the world’s leading business brokerage firm, who wrote the foreword and shared his invaluable tips, advice, and real-world experience.
For more information on John Davies, visit his business Web site at www.sunbeltnetwork.com.
For more information on Barbara’s background, books, and business advice, visit her Web site at www.bizstrong.com.
Author’s Acknowledgments
I give thanks for making this book possible to:
Peter Schenck, who helped me realize that three quarters of a million business owners would be wanting advice on how to sell their businesses over the upcoming few years, and who heaped his wisdom, work, and a wealth of knowledge into this book’s outline, research, development, and writing. The term coauthor isn’t sufficient to describe his role — co-creator might come close.
Dirk Zeller, CEO of Real Estate Champions and author of Success as a Real Estate Agent, who didn’t hesitate for a moment to name John Davies when I asked for his advice on who was the best resource for expertise on business sales.
John Davies, CEO of Sunbelt Business Brokers, who returned my out-of-the blue call and who responded to my request for business sale expertise with a depth of advice and insight that humbles me to this day, for which I and readers of this book will be forever grateful.
The team at Wiley Publishing, which never fails to impress me. First, to Acquisitions Editor Michael Lewis, who steered this book into existence and guided its format and development. To Project Editor Kristin DeMint, who worked her magic on everything from book structure to book content, backed by Copy Editor Todd Lothery. And to Howard Locker, who accepted Kristin DeMint’s invitation to serve as the book’s technical reviewer and who improved this book in dozens of ways.
Matthew Schenck, whose technical support and business perspective kept me current and whose humor kept me going.
Brian Bowler, who bought the ad agency that Peter and I founded, who made selling a business a pleasure and a success story that prompted the countless how-did-you-do-it questions that ultimately led to this book.
Finally and mostly, to everyone with a dream to sell a business and start a new life chapter. Thank you for trusting this book to guide you through the sale process. May fortune follow.
Publisher’s Acknowledgments
We’re proud of this book; please send us your comments through our Dummies online registration form located at www.dummies.com/register/.
Some of the people who helped bring this book to market include the following:
Acquisitions, Editorial, and Media Development
Project Editor: Kristin DeMint
Acquisitions Editor: Michael Lewis
Copy Editor: Todd Lothery
Assistant Editor: Erin Calligan Mooney
Technical Editor: Howard Locker
Editorial Manager: Michelle Hacker
Editorial Assistants: Joe Niesen, Jennette ElNaggar
Cartoons: Rich Tennant (www.the5thwave.com)
Composition Services
Project Coordinator: Katherine Key
Layout and Graphics: Joni Burns, Reuben W. Davis, Christin Swinford, Christine Williams
Proofreaders: Melissa Bronnenberg, Sossity R. Smith
Indexer: Potomac Indexing, LLC
Publishing and Editorial for Consumer Dummies
Diane Graves Steele, Vice President and Publisher, Consumer Dummies
Joyce Pepple, Acquisitions Director, Consumer Dummies
Kristin Ferguson-Wagstaffe, Product Development Director, Consumer Dummies
Ensley Eikenburg, Associate Publisher, Travel
Kelly Regan, Editorial Director, Travel
Publishing for Technology Dummies
Andy Cummings, Vice President and Publisher, Dummies Technology/General User
Composition Services
Gerry Fahey, Vice President of Production Services
Debbie Stailey, Director of Composition Services
Introduction
Crossing your fingers isn’t the path to a business sale. Planning is.
Maybe you started planning for a sale the day you launched your business by naming, structuring, and running it with the payoff of a sale in mind. Or maybe you just woke up one recent morning and decided then and there to get off the business-ownership treadmill, and now you want to know what to do to achieve the sale you’re hoping for. Selling Your Business For Dummies deals with all the variables you may be facing:
You may be certain you want to sell, or you may be leaning toward a sale but also considering other business exit options.
Your sale plans may involve a very, very small business or a company that’s on the big-business end of the small-business scale.
Your timeline may be immediate, or you may be willing to take up to a year or more to strengthen your business before putting it up for sale.
Every business sale involves different factors, but all sales share one common truth: Your business will sell not when you’re ready, but when it’s ready and when a buyer thinks it’s worth the amount of money you’re asking for it.
The purpose of this book is to give you an edge in the crowded marketplace you’re entering by helping you get your business into sale-ready shape and walking you through every step of the sale process.
About This Book
Selling Your Business For Dummies is a guide through the world of business sales — a world to be traveled by some three-quarters of a million business owners over the next few years, according to research by well-regarded universities and business alliances. To give you an idea of the traffic on the road you’ll be taking, projections are that one out of every six businesses owned by retirement-ready entrepreneurs will go up for sale by 2010, up 15-fold from the number of business sales in 2001. Those staggering numbers mean that people seeking to buy businesses will have a huge selection of opportunities from which to choose.
To guide you on your way, this book incorporates advice from an amazing group of people, including professionals in the legal, banking, and accounting fields, chief among them John Davies and the business sale specialists at Sunbelt Business Brokers, the largest business brokerage in the world. Together, we’ve seen to it that this book includes everything you need to know about selling your small business.
This book also has a CD-ROM that includes planning checklists, forms, worksheets, links to useful Web sites, sample sale documents, and a template you can use in a fill-in-the-blanks manner to create the selling booklet, called a selling memorandum, that you’ll use to explain your sale offering to serious buyer prospects.
Conventions Used in This Book
Following the famous For Dummies format, this book incorporates the following style conventions, designed to keep the contents quick and easy to scan and read:
Whenever I introduce a new term you need to know, it appears in italics, accompanied by a short, clear description of what it means.
Wherever possible, advice to take action is presented in bulleted or numbered lists, with the keywords shown in bold so they jump out at you.
All Web site addresses appear in monofont to help you isolate the URL quickly and easily from surrounding text.
What You’re Not to Read
You’re an entrepreneur trying to sell your business while you’re also likely trying to run your business, so you probably don’t have time to read a word more than you absolutely have to read to get the job done. If you’re time-pressed (in other words, if you’re a typical small-business owner), you can skip right over the gray-shaded sidebars scattered throughout the book. Sidebars are full of interesting information and examples that will enhance — but aren’t essential to — your understanding of the chapter.
Foolish Assumptions
I never introduce a For Dummies title without reminding readers that anyone smart enough to turn to one of these yellow-and-black books is no fool, and that’s especially true with this book. If any of the following assumptions describes you and your business, then this book is especially for you.
You own a small, privately held business rather than a publicly held company, or a business with a name known nationally or even globally. (Maybe that’ll be your next business, but it’s certainly not the one you’re selling right now!)
Your business fits the description of 95 percent of all U.S. businesses, with annual sales under a million dollars and fewer than 20 employees. If your business is a little larger but not a mega-million-dollar enterprise, this book is equally for you so long as your business is privately held and you plan to sell to an individual or another small business.
You’re not aiming to sell shares of your company to the general public through an initial public offering, a process that involves legalities, technicalities, investment banks, underwriters, and law firms with deep experience in securities law.
You’re not planning to sell your business to employees through an Employee Stock Ownership Plan (ESOP). This book isn’t an ESOP how-to guide. For that, you need an attorney with specialized expertise.
You want to obtain the highest possible price for your business, realizing that the faster you want the sale to take place, the more price concessions you may have to make.
How This Book Is Organized
Each of the five parts of Selling Your Business For Dummies deals with a different phase of the sale process, beginning with the to-sell-or-not-to-sell decision and ending with the handoff of your business keys and plans. Along the way, this book is written so you can focus on the parts you most need, whether that means getting your business ready for a sale, pulling your financial records into shape, hiring a broker, writing and placing ads, or any of the other sections covered in the book’s five parts.
Part I: Getting Ready to Get Out
This part guides you into the starting gate for a business sale. Chapter 1 helps you weigh whether you’re ready to leave your business, what kind of an exit you’re looking for, and what’s involved in the business sale process. Chapter 2 guides your assessment of how ready your business is (or isn’t) for a sale, and which sale route seems the most likely path given the size and health of your business. Chapter 3 covers the steps, time, and effort you need to dedicate to getting your business ready for the inquiring eyes of buyers, righting wrongs and building strengths, and adding the kind of value that may boost your sale price. Chapter 4 prepares you to hit the Go button by helping you assemble the professionals to assist you through the sale process.
Part II: Packaging Your Business for a Sale
Selling a business and selling a house have one big thing in common: First impressions can make the difference between buyers wanting to take a closer look and buyers turning away faster than you can say, “We should have prepared a little better.”
Part II leads you through the all-important preparation process. Chapter 5 — an important chapter — helps you prepare and assemble the most essential financial information for your buyer and present financial trends and growth projections for your business. Chapter 6 is the chapter no reader will skip; it’s about how to price your business, including how to eliminate red flags that can cost you buyer interest and sale proceeds.
Chapter 7 is especially important for businesses whose buyers want to see summaries of business and marketing plans and operations and policies manuals. Then Chapter 8 brings the story of your business together, providing a template that lets you assemble information from all the preceding chapters to end up with a selling memorandum, the booklet you share — after a confidentiality agreement is signed — with serious buyer prospects.
Part III: Launching and Navigating the Sale Process
The three chapters in this part are a guide to what’s involved from the moment you decide to advertise your business for sale until the day you receive a letter of intent confirming a purchase offer from a ready and qualified buyer. Chapter 9 helps you write and place classified print ads and all-important online postings. Chapter 10 is your guide to the process of prescreening ad inquiries, obtaining financial and background information from serious prospects, and sharing your confidential business information with likely buyers. Part III ends with Chapter 11, which takes you through the final leg of the buyer- development marathon as you receive, evaluate, and accept a buyer offer.
Part IV: So You’ve Got a Buyer! Now What?
Part IV is your map for the make-it-or-break-it leg of the business sale. Chapter 12 explains what’s involved when the buyer does the homework, called due diligence, necessary to be sure your business’s condition is as you’ve represented it to be. Chapter 13 provides the information you need as you work with the buyer to structure the financial and tax aspects of your deal and plan the payment approach. Chapter 14 helps you decipher the financing and tax aspects that come into play in most small business sales. Chapter 15 is about closing the deal and getting the paperwork signed. Finally, Chapter 16 lays out a game plan to follow as you announce the sale and pass the baton to the new owner.
Part V: The Part of Tens
This book’s final part features ten-part lists of advice that you’ll likely turn to over and over again. Chapter 17 presents ten deal-killers to avoid. Chapter 18 shares ten marketplace trends and truths that affect small business sales, and Chapter 19 tells you ten things you may not know about business brokers. Chapter 20 leaves you with a list of ten questions most business buyers tend to ask, for which you want to have your answers prepared, polished, rehearsed, and ready to deliver.
At the back of the book, you’ll also find an appendix that introduces you to all the forms awaiting you on the CD-ROM that accompanies this book. It tells you how to use the CD as well as what’s on it, so if you ever need to see a description of all the forms at a glance, the appendix is where you should turn.
Icons Used in This Book
This wouldn’t be a For Dummies book without symbols in the outer margin alerting you to valuable information and advice. Watch for these icons:
The Tip icon marks tried-and-true approaches that save you time, money, and effort as you prepare for and navigate your business sale.
It’s one thing to read advice and follow steps. It’s a whole other thing to read how someone else successfully addressed the same situation. This icon flags great examples and lessons.
When there’s a danger to avoid or just a bad idea to steer clear of, this icon sits in the margin like a flashing yellow light.
This icon points out essential advice and truths you don’t want to forget.
This icon lets you know that the form or resource being mentioned is also on the CD-ROM. Whenever you see this margin marker, take note, because it signals a checklist, form, or worksheet that’s available for your use, along with step-by-step instructions on how to put the material to work as you complete the selling process.
Where to Go from Here
True to the For Dummies format, you can start this book on any page. Every portion of the book is a self-standing component, so you don’t have to read sequentially from cover to cover to make sense of the content.
You’ll probably use this book by flipping back and forth, gaining input on how to figure out what your business is worth, then going back to see how to add value that buyers will pay for, then going forward to see how your decisions impact your taxes, then getting help with the processes of due diligence and deal negotiation, and round and round. If you’re like most sellers, you’ll be in the sale process — and within the covers of this book — for months, at least. Sooner or later, you’ll probably land on every page.
If you’re time-pressed, this book offers some good shortcuts:
If you’re not sure whether you’re really ready to leave or sell your business, start by reading and completing every worksheet and self-test in Chapter 1. However, if you know for sure that you’re ready to sell, you can just scan Chapter 1 for a good, quick overview of what’s involved before heading straight to the chapters that hold the advice you’re seeking.
If your business is in strong financial and marketing condition, you don’t need to spend as much time with Chapters 2 and 3 as is necessary for owners who need to get their businesses into sale-ready shape. Instead, you can head straight for Chapter 4, which guides you in building your sale team, or to the other parts of the book, which cover various stages of the sale process.
My advice: Read the book cover to cover if your schedule lets you. If you’re in a hurry for specific answers, turn to the table of contents or the index to guide you straight to the information or advice you need.