Selling a Business
Are You Ready To Sell Your Business?
Selling a business that you’ve nurtured and cared for and worked hard to build is not a decision to be taken lightly. We realize this can be a very emotional time.
With the help of the Business Brokers and other Professionals at Astra Business Corporation, you can be assured your sale goes smoothly and you are compensated accordingly.
Comprehensive Service Program
Our comprehensive service program ensures you of a solid sale.
This may be the time you will work the hardest to maintain the revenue and show the projected revenue will be attained. You do not have the time to be involved in time consuming documentation, obtaining valuations, marketing, interviewing and qualifying prospective investors or buyers. Your best use of time is spent maintaining your business.
Plant Tour – This will be done after the buyer has reviewed the financial statements and is interested in going to the next level of due diligence. With your cooperation, we will discretely arrange for a plant tour. This will be an excellent time to promote the company and generate enthusiasm regarding the company’s future prospects and get to know the buyer.
We have seen many viable businesses put on the market by Realtors and Brokers, for periods of one or two years or more, without the proper attention to presentation, documentation, valuation and a weak marketing program resulting in businesses that did not sell. With our comprehensive service program, your business will sell.
Astra has put together an Alliance of Strategic Partners to assist in all aspects of selling your business. They are experts in valuation, accounting, legal, tax law, finance, asset appraisers, business brokerage and financial planners. They can help both Sellers and Buyers in concluding a successful sale and acquisition. We can also help you in developing a business plan. This helps the buyers when applying for financing with the financial institutions.
The Business Brokers in our alliance are local, national and international. They have proven capabilities, are qualified and act in a professional manner to keep your information confidential. When you engage Astra, you have a multitude of people working for you. You have a dedicated, professional team of experts and all of their contacts.
Astra’s proven system maximizes the money you keep and minimizes the cost of professional fees. Banks have a hard time to finance the buyers, the Seller can make extra income from financing qualified buyers. The note you carry will be fully secured by assets, or shares. Seller financing will most likely be in the LOI or Offer to Purchase.
Buyers want you to have an interest in the business after you sell the company to assure the company’s revenue will continue after the sale.
Industry statistics show it usually takes eight to eighteen months to sell a business. Using Astra’s system, businesses usually sell within in a shorter time period.
Phase 1. Valuation
There are different levels of valuation. A professional appraisal is one that the banks will recognize to assist in financing the purchase. An “estimate of market value” is a lower level of valuation and not recognized by the banks but gives the buyers and sellers an idea of value.
Valuation must be done first to determine the approximate market value for which the business will sell. Overpriced businesses waste time and money. Both the seller and the broker lose credibility. Most buyers are very sophisticated.
Several different formulas are used in developing the value. With you and your accountant’s co-operation we shall work together to arrive at the businesses normalized cash flow (EBITDA) and a “Fair Market Value”. As to whether you are selling assets or shares/stock, you must decide after consultation with your accountant.
Phase 2. Offering Package
First, a one-page summary called a “Confidential Business Information Statement” (CBI – profile) will be developed. This includes all the general pertinent facts.
Second, a comprehensive review package (CBR) will be compiled, containing all aspects of the business; including, the business description, investment opportunity, business history, products and service, competition, marketing/distribution, ownership, employees (key people, no names), wages paid, operation and equipment, facilities, financial summary, and business projections for future growth.
The one-page generic CBI – profile information sheet and the presentation package must be approved by the seller before distribution to prospective buyers. The company name and location are not included. Sellers should have an appraisal done on the equipment and property (if included in the sale) so they have an independent third-party valuation.
Phase 3. Marketing
Stage 1 – With the help of the Seller, a list of potential purchasers is prepared. We look for similar businesses, or competitors, that could prosper by a synergistic purchase. These prospects should pay the highest price. They will be contacted confidentially to find out if they are interested.
Stage 2 – Search Astra’s network data base for buyers, accountants, lawyers, finders, business brokers in Canada, the United States and internationally, using the generic, one-page Confidential Business Information Statement (CBI – profile).
Step 3 – Develop an advertising program in Astra’s and other Internet Web Pages.
Presentation Of The Offer And Information Package (CBR) Requirements
After presentation of the Offer or Letter of Intent, we shall review these with you, the terms contained therein. It is at this point you should review all the implications. The buyer is then advised of your reply to the Offer or Letter of Intent.
Upon presentation and acceptance of the Offer or Letter of Intent, and their initial deposit, the buyer will enter into a period of due diligence. This is the crucial time in the sale. We shall work diligently to keep the momentum going forward while working with the buyer’s professional advisers. The buyer often requires assistance in raising financing for the venture and may require the services of experts in equipment and property appraisal.
After a successful conclusion of the due diligence period, the buyer is asked to provide a further deposit (usually the combined deposits will be ten percent of the sale price) and sign a waiver of Conditions Precedent (subject conditions) in the contract. A signed copy of this agreement is then presented to the seller. All deposit money is now non-refundable.
Then comes the counting of the inventory and pricing. All parties are expected to participate. However, we have successfully used professional people to do this as it eliminates the chances of any misunderstandings occurring resulting in the collapse of the sale.
Closing sometimes can be elusive as the lawyers now get involved. Their responsibility is to make sure there are no outstanding debts, liens or lawsuits outstanding. We will follow the transaction day by day until closing to make sure everything goes smoothly.
Dual Agency: We must inform both buyers and sellers if we are acting for both parties.
Note of caution. Be aware that buyers may show up on their own after they have been introduced. Please don’t talk to them unless we have previously arranged a meeting and even then, please avoid discussing price, it may compromise your position. Make any excuse, like you are tied up with someone, or you have an appointment to go to etc.
All information provided will remain CONFIDENTIAL.
To see how we work with Buyers, go to BUY A BUSINESS
Information Package (CBR) Requirements
In order to compile proper CBR (comprehensive business review) package,
valuation or an estimate of value, we require the following from you:
- Information Package (CBR) Requirements
- In order to compile proper CBR (comprehensive business review) package, valuation or an estimate of value, we require the following from you:
- Broker Agreement – Astra Business Corporation form
- Confidential Business Information (CBI) – prepared by Astra
- Financial statements, 3 to 5 years if available. Sales break down by product included.
- Three years of net adjusted cash flow to owner (EBITDA).
- Note any change in expenses or purchase of assets from the last financial statement
- Monthly sales figures from last statement and interim year to date statement if available
- Copy of lease (summary page) or assessment notice of property if included in the sale or separate sale
- List of Assets (equipment) included in the sale with market value. Appraised value will be required by the buyer.
- Agreements of any leased or rented equipment or vehicles.
- List of Assets not included in the sale, personal or non-owned items
- Income tax returns for matching years above
- List of employees, position (title, no names) length of employment and rate of pay
- Licenses, if any
- Franchise Agreement
- Brochures, promotional material, menu
- Corporate resolution to sell the business, consent from partners and/or spouse
- Web page, Photos and Video
- Equipment and property appraisal would expedite the sale and give credibility.
- Business Profile – form supplied
- Commitment / Marketing fee
Sell Your Business
Make The Call Today: 604-240-6164
Astra Business Corporation pays up to $10,000.00 on a successful transaction, for qualified* referrals for anyone who is ready to sell their business in the manufacturing, distribution, services industry or any profitable business enterprise.