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DFS Associates Corporate Finance on Executive Information: Seven Selling Secrets

About the Talk

February 6, 2002 12:00 PM

ON, Canada

ON, Canada

Executive Information: Seven Insider Industry Secrets to Maximize the Sale of Your Business

During our Executive Briefing, you will learn insiders’ secrets to successfully selling a business:

Timing is the top concern

Most company owners love to say that when they turn 60 or their kids graduate, they will sell their business. However, such personal deadlines do not form a solid basis for getting a good price for companies.

Think Outside the Prospecting Box

A company’s competitors, its vendors and even workers often compose the most likely buyers of a business. Statistically, about half of last year's published transactions came from within the sellers' own sector.

Nevertheless, most of these buyers are often so-called economic buyers who are unwilling to invest substantial amounts of extra capital. On the other hand, premium buyers which include large public firms realize great potential for growth and are therefore willing to pay more dollars. You can enhance your capability to achieve a substantial profit by targeting these buyers.

Find Who the Best Buyers Are and their Reasons for Buying

Who are these premium buyers specifically? In general, they are big local and global public firms. Normal acquisitions are basic to their approach for profitability, growth and diversification. European buyers are at the top of this group, claiming over 70% of their announced deals with private firms last year. They are not only grabbing Tokyo, Japan private middle-market firms for expansion, they are eager and capable of paying top dollars. Ostensibly, these buyers know that they are investing in the future through the easiest and fastest manner.

Never Use Your Balance Sheet to Negotiate

Typically, an economic buyer will look closely at your financials. Do not let them! Often, it is a sure way to haggle a low price based on how your business stands at the present. To maximize your price, convince them of your firm’s market value, or your potential for future growth. Present a positive picture of your company if it can obtain enough capital investment and more resources to drive its operations.

Avoid Being Diverted through Formulas

A common mistake among many business owners is to base their firm's value exclusively on historical performance instead of on future projections. Our tested M&A approach initially reveals every firm’s special and usually unappreciated characteristics. These unique qualities can never be reduced into a mathematical formula, yet are crucial in achieving the highest price. Using this perspective, DFS Associates can proceed to develop a growth projection that considers the complete spectrum of your business’ strengths. What comes out is a greatly improved value for the company, something that a single formula could not derive.

A Transaction’s Terms are Crucial to Success

Avoid being distracted by the dollar signs while forgetting to check out the fine print. When do you finally get your money? How much do you expect to get? How much tax will you be paying? The structure of a transaction can become twice your net proceeds or cut them into only half. The rule to follow is this: What matters is what you get, not what you get to keep!

Familiarize Yourself with the Selling Process

Selling a business may turn to be your most important economic event of your life, so learn what will be required to make it successful and profitable for you. Our strategic approach provides you the structure most professionals use to transact for multi-million dollar mergers and acquisitions. Some of the vital steps you need to know are market research, valuation, and prospecting. Well-informed sellers create well-informed buyers. And informed buyers appreciate deeply the essence of value and know when to pay good money for it.

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