FAQ’s for Sellers

Selling a business can be overwhelming and you might have a lot of questions about the process. Robert Reid Group can give you the direction you need and provide confidence that you can achieve your goals.

If the time is right for you to sell your business, or if you are considering selling your business in the future, you might find the answers to some of the following questions helpful.

  • Should I tell my employees that I am selling?

    There will be a right time for sharing with your employees about the sale or your company. However, you should not prematurely tell your employees that you are selling. If you are in the beginning stages of considering selling your business, the actual sale could be eight months or a year away. Your key employees could begin looking for other work, most likely at your competitors. Key accounts could find out the status of your selling and begin looking for new vendors if they feel uncertain about the future.

    The value of your business could be affected by any number of these or other factors at a time when you are trying to achieve the best possible price.

    An exception to this is that, depending on your organization, it may be necessary to inform a key employee about your plans to sell the business. Usually this will be your accountant or a senior-level manager. Since buyers and lenders will be requesting updated financials on a regular basis, bringing them in early can help prevent rumors from spreading. Also, potential buyers might request to negotiate non-solicitation or non-compete agreements with senior level managers.

    In short, typically, the best time to share news of a company sale with your employees is when you are able to introduce them to the new owners.

  • How long do I need to stay with the Company to train new owners?

    Based on the size and type of business, the seller will typically stay on for a period of three to twelve weeks to train and ensure a smooth transition. More complicated technologies or larger acquisitions require a longer, negotiated period of time. This also largely depends on how the overall deal is structured.

    In an extended transition, the former owner’s compensation typically is negotiated based on an estimate of how much would be needed to pay someone in that industry to replace the owner’s level of contribution to the company.

  • How do I keep the sale of my business confidential?

    Confidentiality is one of the most important issues surrounding the sale of your business.

    Your ongoing relationships with employees, customers, and suppliers are extremely important factors to your company’s success and to the value you will receive for your company. Any premature indication of a possible change in ownership could disrupt these relationships and could weaken your company’s competitive position. That is why confidentiality is critically important at every stage in the process of selling your business.

    With the proper care and procedures, it is possible to minimize the risk of an untimely disclosure. Robert Reid Group’s first contact with potential buyers is made through our strategic marketing campaign using an Executive Summary or Blind Profile. Your company details and location are only described in general terms. A description of your services, products and opportunities for growth are explained along with key financial metrics. However, your company is not identified in the Executive Summary or Blind Profile.

    You can rest assured that the process will remain confidential when you use Robert Reid Group to handle the sale of your company. This will allow you the freedom and time to continue to focus on running your business throughout the sale process. Ensuring that there is no disruption in your continued operations is a key metric in maximizing your closing price.

    Robert Reid Group maintains your confidentiality and confidence by only releasing information about your business to qualified, interested buyers who work under and agree to our confidentiality agreement.

    Robert Reid Group maintains your confidentiality and confidence by only releasing information about your business to qualified, interested buyers who work under and agree to our confidentiality agreement.

  • Will potential buyers want to visit the Company?

    Meeting are arranged with qualified, vetted and interested parties, giving you the opportunity to meet the buyer while they get to find out more about your business. Meetings can be held in neutral locations in order to maintain confidentiality.

  • How do I find out what my Business is worth?

    A business valuation is an essential part of running a business, preparing for an exit strategy or getting ready to sell your business. For these or any number of other reasons, you need to know how much your business would be worth in the current market.

    Robert Reid Group can provide you detailed business valuation which will provide a general price range you could expect in today’s marketplace, and will help you decide if the time is right to further explore a sale.

  • Why should I use Robert Reid Group?

    In order to achieve the highest price it is important not to take your eye off the ball of running and growing your business. Selling a business requires a sustained effort and can demand much of your time. Preparing the marketing material for presentation, running a sustained, strategic marketing campaign and screening the interested parties are only a few of the time-consuming steps in selling a business.

    The process of selling a business can be very complex. Whether you’ve sold a business in the past or are selling a business for the very first time, it is imperative that you work with an expert. Robert Reid Business Group can help you navigate through what can be some pretty choppy waters.

    Robert Reid Group has the industry connections to cast a wide net for prospective buyers. We understand the process, the documents needed and how to keep the deal moving forward. We act as a buffer between you and interested parties when questions and difficult situations arise. Most importantly we help to facilitate confidentiality and discretion throughout the process.

    Selling your business could be one of the most important and complex decisions you will ever make. You owe it to yourself, your family, and your employees to do it right.

    From experience, Robert Reid Group knows:

    • How to build and run a business
    • How to get a business ready to sell
    • What is important to an owner during the sale process
    • How to protect anonymity and confidentiality of the business and the owner
    • How to promote the business to the right market of buyers
    • How to maximize the amount of offers through strategic marketing
    • How to negotiate and close the deal

    Robert Reid Group will consult with you to understand the competitive advantage of your business and the goals you would like to achieve. We will work with you to help you understand how to maximize your sale price and how to structure a sale. We will cast a wide net for potential buyer candidates and provide aggressive, confidential marketing. We will communicate with and screen interested parties. Once a good match for your business has been identified, we will assist you in negotiating terms and a deal structure to achieve the best possible outcome for you.

  • How will I know what is going on during the sale process?

    Regular communication and a clear understanding of what’s going on is vital to any business sale. You will receive prompt, accurate feedback and reporting to keep you informed at every stage of the process.

  • How long does it take to sell a business?

    National statistics show that, on average, it takes between five and twelve months to sell most businesses. Some businesses will take longer to sell, while others will sell in a shorter period of time.

    The industry, location and financial performance of the business along with the current economic conditions all come into play in the length of time needed for a business to sell.

    Price and terms of the sale have the biggest impact on timing. Clarity of documentation, cleanliness and accuracy of records, and the amount of time needed to gather marketing information are also factors.

  • The sale process timeline includes the following steps:
    • Listing
    • Conduct research and create marketing materials including the Confidential Business Review and a Strategic Marketing Plan
    • Carry out the marketing campaign
    • Conference calls and determination of buyer interest and qualifications
    • Indication of interest including letters of intent
    • Detail negotiations
    • Due diligence, document preparation and transition planning
    • Closing

    As each business is unique, so too is the selling period an average business requires. However, there are some preparatory steps that can be taken to move the process along.

  • What do I need to do to get ready to find a buyer?

    There are some things that you can do to maximize the overall value of your business and speed up your sale process. One thing that is very helpful is to gather all of the important financial documents that the buyer might require during the due diligence process. Requirements will vary by buyer, industry, and business. These items might include:

    • Three years of financial statements
    • Three years of tax returns
    • On-going contracts, leases and licenses
    • Payroll summaries for one year
    • Details of all chargebacks to discretionary income and owners’ salaries
    • List of all equipment and other assets to be included in the sale with current market values
    • List of all equipment and related assets NOT included in the sale
    • List of all employees with job descriptions and employment dates
    • A copy of all marketing-related material

    Having these documents organized and ready for the due diligence process will make the process easier and smoother.

  • What is an NDA or Confidentiality Agreement?

    A Non-Disclosure Agreement or Confidentiality Agreement is a legal document signed by both seller and buyer in which both parties agree to hold each other’s financial and private information in strict confidence. A buyer who is willing to sign this agreement is interested enough in your business to sign a legally binding contract.