The best time to exit is when the business is doing well and before you need to sell. You cannot prepare for all life events, such as health concerns or family circumstances. Regardless of the reasons, selling your business is an emotional process.
Typically, the sale will occur in less than one year. However, depending on the condition, size, and complexity of your business, the process can take three months to three years. Organization and record keeping require time and energy, which many owners have in limited supply. As a result, assembling the documents needed for due diligence can take several months.
Owners often wait too long to sell their business.
Increase the interest in your established business by providing evidence of success.
Transitioning your business is much more than a financial transaction. It’s a significant life change that can elicit a range of emotions, from excitement to anxiety. While selling may be the right decision for you, clarifying your reasons for the sale early on can help you process unexpected emotions.
Absolutely! Continuing to operate with the business name improves the continuity of customer and supplier relationships.
We enjoy hearing every owner’s story. However, some companies do not possess the requirements to be a good fit for us. That is why we focus on helping every owner who contacts us, even if we decide to pass on the opportunity.
No! We evaluate the information you provide to determine if your business is a candidate for our buy-grow-keep strategy. Expanders is not a data broker and we do not sell access to your personal information.
We take confidentiality and privacy seriously to protect owners from harm. In almost all cases, the sale of a business is highly private, with not even the employees aware of the sale. Access to your information is restricted to our evaluation team and maintained under non-disclosure.
We use a secure cloud-based content collaboration and file-sharing platform. This gives you an easy means to share information with us that is more secure than email. We apply least-required access, meaning that only the people on our deal team who need access are granted access to the information.
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Whether based on the value of assets minus liabilities or a multiple of financial performance (net profits), the purchase price, payment terms, and any contingencies or conditions will impact the value of the purchase offer.
Other considerations for determining value include using the Discounted Cash Flow (DCF) or appropriate peer comparable analysis (in terms of industry, size, and risk profile) and considering factors such as leadership team, margins, differentiation, growth prospects, industry trends, intellectual property, customer base, and other uncertainty factors.
Numerous variables impact the value of your business.
Accuracy of the financial information provided. Are revenue, expenses, and profits increasing or shrinking? What about outstanding debt? What is the condition and value of the assets? Who are the customers, what is the churn, and how are new ones acquired?
Years in business, lawsuits, reputation, customer loyalty, and tax compliance. Employment practices, talent retention, and material changes to the workforce. Does the company have all licenses and permits to operate? Are processes documented?
Does the business have growth potential, or is it too dependent on the owner? What are the owner’s representations and warranties? Can identified risks be minimized or mitigated? Can processes and technology improve the operation and customer experience?
The non-GAAP accounting, interest rates, lack of market data, age of physical assets, the illiquid form of the investment, and the operational dependence of the company on the controlling shareholders. Then, we add the subjectivity of the assumptions made by the sellers and the buyer, which leads to further divergence in the valuation.
No. The business valuation theory of fair market value is flawed because the buyer and seller have different levels of relevant facts, even if the parties are not forced to act. Ultimately, any business is only worth what a buyer is willing to pay. What the seller thinks or hopes the company is worth is often more than the value the buyer assigns.
Companies with revenue under $3M typically sell for 2.0 to 3.5 times the SDE. Owner-reliant companies with limited documentation and inaccurate financials will be lower than that.
The first step is completing and submitting the Seller Details form on this website. This basic information lets us quickly determine how best to proceed with the review before we coordinate a time to connect with you. A Non-Disclosure Agreement (NDA) will be completed if we mutually agree to proceed before you provide additional company details.
As an owner-operator, there is no reason to feel awkward or ashamed. The human connection is so important and the reason we meet you where you are without judgment. You can be honest upfront, which is less uncomfortable than telling us later.
We understand that this process can be stressful. If we determine that your company is not a good fit, we will provide you with feedback and offer introductions to two or three business brokers who can assist you.
When selecting a business broker in Ohio, it’s essential to consider their experience, reputation, and local market knowledge. A broker can significantly impact the success of your business sale.
Most owners delay the notification until the purchase agreement is signed at closing. Occasionally, owners will share this information with key personnel as we prepare to transition.
To realize the value of the acquisition, a smooth transition with customers and suppliers is essential. Customers must see no decline in service or response during the change in ownership.
Our goal is to improve upon the foundation established to make this transition a positive experience for everyone. The acquisition will be communicated to customers and vendors based on a mutually agreed-upon time and disclosure method.
The essential documents include a Non-Disclosure Agreement (NDA), Letter of Intent (LOI), and Purchase Agreement. Financial statements, business tax returns, asset lists, insurance policies, deeds, building and equipment lease agreements, and employment agreements are also commonly provided by sellers to the buyer during due diligence.
Even if you plan not to use a broker to sell your business, you will need an attorney to review the LOI and Purchase Agreement. Your accountant or CPA will have already prepared the business returns and will be able to provide feedback to you on the tax considerations of selling.
We acquire businesses using a combination of cash and debt (business loans) to keep leverage low (debt less than equity). This method places less demand on the business by reducing debt service and improving cash flow for reinvestments.
Several deal structures are used in business transactions, each with advantages and disadvantages. We typically pursue the purchase of assets. Common deal structures include
There is no accurate answer since each owner has different desires and timelines. We will mutually agree on your responsibilities and the duration of your role as we finalize the purchase price.
Retaining personnel and integrating their expertise is essential to driving growth. We foster team collaboration and unity, facilitating a cohesive organizational culture of growth, respect, and success.
The organization has stakeholders, both internal and external. Our stakeholders include you as the seller, banks, lenders, employees, customers, vendors, suppliers, shareholders, government, and communities.
No. Each of these terms has different meanings.
Expanders, Inc., an Ohio C-corporation, acquires privately held companies in central Ohio when the owners have life-changing events or are ready to retire.`
Our business model is more than taking profits and flipping companies after the holding period. The main drivers of value include the culture to retain a quality workforce, operational improvements with technology, cost and cash management for optimization and performance, multiple expansions through acquisition, and limited leverage via equity/debt financing.
The current industries of interest include
Businesses under $1 million in revenue are considered Main Street. The buyers of these businesses are usually individuals who become owner-operators. Buyers perceive Main Street businesses as riskier, so they sell at lower multiples than middle-market businesses.
The U.S. Small Business Administration defines a small business as a firm with revenue ranging from $1 million to over $40 million and an employee workforce of under 500.5. Based on the SBA’s definition, the 33.2 million small businesses in the United States make up 99.9% of all businesses nationwide.
Generally, SMEs are independent firms with fewer than 50 employees. The traits of SMEs include annual sales, number of employees, the number of assets owned by the company, market capitalization, or any combination of these features. The U.S. NAICS industries and the SBA define SMEs differently from one industry to another.
According to the Corporate Finance Institute, the lower middle market refers to companies with annual revenue between $5 million and $50 million. Different groups and authorities use different definitions for middle-market firms, and the standards regarding the requirements for human and physical capital may vary in different industries.