[ PROCESS OF SELLING YOUR BUSINESS ]
The only thing harder than starting your business
may be selling it.
It’s easy to dream of the day you sell your business. You will finally get to reap the rewards of all those years of hard work — the freedom, the payout, the chance to begin a new chapter in your life. It all seems close at hand.
Yet the reality is that selling a business is never easy. It’s a process that only a fortunate few business owners embark on, and a process that can be both overwhelming and filled with complexity.
It takes a lot of preparation, commitment, and the right circumstances to achieve a successful sale of your business. Good outcomes also depend on partnering with the right team of experts — professionals who can not only help you navigate the selling process, but also understand you, your business and your goals for a sale.
Allan Taylor makes the process of selling your business easier.
We know what it’s like to sell a business because we’ve done it ourselves. We’ve taken our own firsthand experience, combined it with years of helping other business owners sell, and developed a proven process to make your journey easier. Allan Taylor understands this point in the lifecycle of your business, and can guide you through the steps that will lead to a successful outcome.
[ FAQs ]Find answers to some of the most common questions business owners ask.
STEP 1: ASSESS
Every business is different. Every owner is different. Every deal is different. Allan Taylor starts by having an honest conversation with you about your business, why you’ve decided to sell, and what your expectations are for the process and the outcome. We want to fully understand your goals for selling and assess the entire situation before any further steps are taken. We also want to ensure that you’re ready to move forward with selling your company.
At Allan Taylor, our closing rate consistently exceeds 80 percent. Why? Because we take the time to do the proper research and ask the hard questions. Our goal is to get your business sold and to avoid any potential disappointments. This can only be achieved through a solid assessment of what has brought you to the decision to sell.
STEP 2: DECIDE
After Allan Taylor has a clear idea of your goals, expectations, and the state of your business, we work with you to make the final decision on whether you should sell now or wait.
Unlike many business brokers, we promise that we will never “sell” you on selling your business. It’s either the right time or it isn’t. While we love the opportunity to partner with great business owners in achieving their goals for a sale, we also know that you and your business must be ready for the rigors of the sale process.
If we determine that now is not time to move forward, we’ll talk to you about options for building value and selling at a later date. We can also recommend other exit strategies that might be a better fit for your situation.
STEP 3: MARKET
If we’ve all determined that now is a good time to sell and expectations have been set accordingly, we’ll enter into an agreement with you to sell your business and get you ready to go to market.
The first thing we do is create a marketing package to present your business to buyers that is second to none. Since you only get one chance to make a first impression with buyers, we will make sure your business is seen as a highly attractive acquisition target. Allan Taylor will also complete critical documents that protect you and ensure that only serious, qualified buyers are allowed to view the opportunity.
Finally, we will work with you to develop a solid strategy for generating buyer interest — both regionally and nationally — while maintaining strict confidentiality. We have a number of different tools to get your business exposure in the marketplace, some or all of which we will use to quickly and effectively generate interest with the right buyers.
STEP 4: NEGOTIATE
Once Allan Taylor has generated enough interest in your business, we can offer a controlled auction. A controlled auction is where multiple buyers compete for the opportunity to purchase your business. This is typically the best way to maximize the price of your business and determine its true value.
When we have qualified buyers who are interested in submitting an offer, Allan Taylor will negotiate on your behalf. Our team will control the flow of communication with buyers, field and respond to requests for information, coordinate conference calls and onsite visits, and help you negotiate until the right buyer has been identified.
Buyers typically submit a Letter of Intent (LOI) or Indication of Interest (IOI), which is a non-binding agreement that states the purchase price of the business and basic terms required to complete a transaction. We make sure both sides are comfortable with the initial framework of a deal before moving forward with due diligence.
STEP 5: MANAGE
We’ll be honest, due diligence is typically one of the most stressful phases in the entire selling process. However, if we’ve done our job right then much of the legwork will already be done. Our goal is to keep the forward momentum so that we can all get to the closing table without any surprises.
During this phase, we will be managing many critical details all at once. We will collaborate with you and all the parties involved to structure the best terms for the deal, to facilitate buyer due diligence, and manage expectations for a successful sale. It may not be easy, but the end will be in sight.
The final stage is preparing for closing the sale of your business. We will work with you and the buyer’s deal team to prepare a timeline and final checklist of all items that need to be completed before the closing date. We’ll keep everyone on task, then use the day of closing to execute all legal documents and disperse funds.
STEP 6: CELEBRATE!
This is the point where we have crossed the finish line and can celebrate a deal well done! You will join the fortunate few entrepreneurs who have not only built a great business, but were able to top it all off with a successful sale to new owners.
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[ FAQS ]
What kinds of clients does Allan Taylor & Co. work with?
Most of our clients are founders of successful businesses with between $1M and $40M in annual sales and up to $5M to $6M in pre-tax earnings. Their reasons for wanting to sell vary from retirement, to wanting to start a new venture, to simply being done with the rigors and responsibility associated with owning a business.
The majority of our clients are looking for a complete buyout, although others just want to “take some chips off the table” by having a partial exit or liquidity event. We also work with business owners who believe that selling all or a majority of their ownership is the best path forward for their business to grow (i.e. the business is poised for growth, but a new owner will need to take it to the next level).
Are there certain businesses you don't work with?
We never say never, but we don’t typically work with distressed businesses (i.e. businesses that are unprofitable and/or in need of a turnaround). Other types of businesses that we tend not to work with include: low-end retail, restaurants, gas stations, convenience stores, franchise resales, laundromats, dry cleaners, construction and building trades, landscaping and salons. Many of these types of businesses are either too small, too reliant on the owner or have difficulty attracting good buyers.
Regardless, please feel free to contact us if you’d like to discuss whether or not we’re a good fit for each other.
As a rule, we refuse to work with businesses that are unable to promptly produce clean financial statements and tax returns.
Does Allan Taylor & Co. specialize in specific industries?
In the M&A world our firm is considered “industry agnostic.” We are quick to tell you whether or not we have the expertise and experience to help you sell your business. One of the things we love most about what we do is working across a variety of industries and business models. See a representative list of industries that we’ve worked with above.
Are you business brokers?
We are not business brokers. Most business brokers run their firms on a real estate model (commission only), and favor quantity over quality. In other words, they take as many listings as they can and hope that a handful of deals close. Industry statistics show that only 11% to 20% of businesses listed with a business broker ever sell.
Allan Taylor & Company takes a different approach, bringing investment-banking level services to lower middle market M&A. We’re typically working on six to ten transactions at any given time; focusing on a small number of deals allows us to give you and your business the time and attention you deserve. Due to our careful selection, preparation and adherence to a proven process, our close rate is consistently over 80%.
Unlike business brokers, we take a consultative approach to helping you with the sale of your most valuable asset. If we think now is not the best time for you to sell — or that selling may not be your best exit strategy — we will tell you. We’ll never sell you on selling your business, or use high-pressure sales tactics of any kind.
We call ourselves M&A Advisors. Whatever you call us, just be sure to call us if you’ve built a fantastic business that deserves the best available representation in the marketplace when it comes time to sell.
How are your fees structured?
We start every engagement with our business valuation, which is a stand-alone service with its own fee. If you engage Allan Taylor & Co. to sell your business, we charge an upfront retainer upon signing. There are no others fees until we sell your business, at which time we earn a Success Fee. (Our upfront retainers are typically $5,000 to $15,000 depending on the size of the business and scope of the work involved, and are credited back against our Success Fee at the time of sale.)
Our Success Fee can be calculated using the Double Lehman scale, which is standard for middle market M&A. The Double Lehman charges a percentage of the total sale price of the business using the following formula:
10% of the first million
8% of the second million
6% of the third million
4% of the fourth million
2% of the fifth million, and any amounts thereafter
One of the things that makes us different is that we are willing to work on a flat-fee basis as opposed to a percentage. Oftentimes agreeing on a flat fee can take some of the complexity and uncertainty out of M&A fees, making a deal go smoother as it nears completion. Rest assured that we will have an open discussion about our fees before you engage us to help you sell your business.
Why do you charge an upfront retainer?
Allan Taylor & Co. has developed a reputation for producing the best marketing materials available at this level of M&A (<$6M EBITDA). We regularly receive compliments on our work from private equity investors and buyers of all kinds, lenders, CPA’s and attorneys. Quite simply, it’s what we’re great at.
In order to give you and your business the representation that you deserve — and attract the highest-quality buyers — it takes us four to six weeks to create marketing materials that meet our standards. The upfront retainer offsets some of the time and hard costs associated with this very important work; work that needs to be done before we go to market and the real work starts!
Beware of trying to save money by using a business broker who doesn’t charge an upfront retainer. They will be incented to do as little as possible on the front end, which precludes them from doing the work required to attract high-caliber buyers. They also have a tendency to slam a deal together quickly in order to get their fee. You get what you pay for, as the saying goes. This is not the time to cut corners.
How do you work with out-of-state clients?
We’ve been working with clients from across the country since 2009. While most of our clients are located in the south central U.S. — specifically Arkansas, Missouri, Oklahoma, Texas and Louisiana — we’ve worked with clients from Oregon to New York City and many points in between.
We’re comfortable working remotely, and can get a deal closed with minimal travel involved. If you’re unsure about whether or not we’re a good fit, please give us a call to discuss.
How do you find buyers?
Allan Taylor & Co. has a number of ways to attract buyers for your business. We subscribe to national online databases and marketplaces that list businesses for sale, have our own internal mailing list of buyers and have developed a national network of advisors and professionals who work in M&A and search for acquisition targets. We also use the connections we’ve built through social media, and work with clients to develop targeted lists of strategic acquirers.
Many business brokers and M&A advisors claim to have a national network. If so, we encourage you to get more information about what that means. In our case, we have carefully curated a national network — and gained a national reputation — through the work we’ve published in the New York Times, Forbes and Inc. Magazine to name a few. We have a large following through social media channels like Twitter and LinkedIn, and are routinely asked to speak and contribute as thought leaders in middle market M&A.
We will discuss the many ways in which we can attract high-quality buyers for your company, and ensure that you are comfortable with our methods well before we go to market.
How will you market my business for sale?
As mentioned above, our marketing materials are second to none. The two primary marketing documents that we create are the teaser (a one-page blind profile of the business), and the Confidential Information Memorandum (CIM). The CIM is approximately 25 to 30 pages, and tells the story of your business and the opportunity associated with an acquisition. It contains enough information for a buyer to determine whether or not to move forward and make an offer to buy your business. Only serious buyers who have been qualified by us — both operationally and financially — and have signed a Nondisclosure Agreement are allowed to view the CIM.
Again, the quality of our marketing attracts exceptional buyers. We’ve had a number of buyers say that, out of the hundreds of CIM’s they see in a year, ours make them stop and want to learn more about a client’s business. We’d be happy to provide you with examples of our work, and encourage you to do the same for any and all of the M&A advisors or business brokers you are interviewing.
I have worked with Allan Taylor & Company on two occasions. First, when they represented the seller of a company I purchased, and the second when I engaged them to help me with an acquisition. I plan to use them again in the future. Allan Taylor & Co. is a great company to work with! – Jerry M. (Buyer)