In our previous articles we outlined the steps taken to have your business professionally marketed for sale and how to buy a business that fits your objectives. In this article, let us examine, as a business owner, the contents of your first meeting with your Business Marketing Professional (BMP).
A BMP’s primary function is to present your business in its best light. They assemble marketing documents, contact interested parties, arrange meetings and interviews, handle scheduling, and implement performance strategies to aim toward a closing transaction. They need to be accurately informed of the workings of your business and how you have operated. They act on your behalf – as your representative – to potential qualified buyers who have already expressed interest in purchasing a business such as yours.
Prior to making your first appointment, it may be necessary for your Business Marketing Professional to determine the ‘marketability’ of your business. Some of the introductory questions that the BMP is likely to pose are: 1 - How long have you been in business? 2 – How many people are in your employ? 3 – Your reason for considering selling your business and 4 – What is your current revenue?
Addressing these inquiries directly helps the BMP determine the basic financial posture of your company. Should, at this juncture, the BMP determine that it may not be in your best interest to market your concern at this time, they will state this. This is not done to portray your company poorly. It is done to save you time and money as there is little point to begin marketing a firm that may be currently undesirable in the eyes of a potential buyer or does not now meet the buyer’s requirements.
Buyers, of course, are looking for a profitable business with a good long-term record of success and stability. Businesses who posses these characteristics – particularly in today’s uncertain environment – are in demand.
Should answers to the introductory questions seem favorable, the BMP will usually then request copy of your last 3 years of financial statements. These need to be reviewed to prepare for a productive first meeting. This information helps the BMP to see patterns – highlights of successes, for example – or to see how funds are being allocated, debt levels, cost of goods sold, and other types of data to understand the general health of your organization.
One reviewed, an appointment is set. To maintain confidentiality, both of you may want to agree on how the BMP would be introduced to any of your staff members, should that occur. Of course, you may want to avoid giving clues that the business is up for sale.
Most first meetings usually take place at the business and it is a good idea to meet in private and away from the earshot of your employees. This is done to maintain confidentiality. By meeting on premises, the BMP gets a better idea as to location, accessibility, the attitude of the employees and business owner, as well as to see the operation is working order.
This first meeting is mostly a “getting-to-know-you” endeavor. Do you think you could work together? Do you understand the rationale behind the marketing process? Are you willing to commit to having your business marketed? Are you satisfied that the BMP will work to find buyers for your concern?
You may want to give some advertising literature (if available) to the BMP. Doing so enables the BMP to gain insight on how the company is presented to potential customers. You will likely discuss not only what your business does, but how you do it. You might point out the structure of your customer base, the goals of your organization, and the deeper reasons for your desire to sell the business. You will likely discuss not only the history of your enterprise, but also point out how your company is performing, and illustrate any important future plans. You may cover overall conditions in your industry, your concerns, as well as key selling points.
The BMP will share details about the steps of their marketing plan and how your business can be properly positioned in the marketplace. They will review with you how to obtain a third-party valuation that should be conducted by a qualified business valuation expert. The terms of the listing agreement are also covered.
Should the information shared meet with your satisfaction (as well as with the BMP), then you are ready to begin the process of having your concern professionally marketed.
© 2008 Contributing writer Calvin Coolidge is cousin to 30th US President Calvin Coolidge. As a National Representative, he holds the following certifications: Business Transfer Specialist (BTS), Financial Recasting Analyst (FRA), Business Marketing Professional (BMP), and Financial Recasting Consultant (FRC). He works with Parker Briggs Business Group in Morristown NJ. He can be reached at 973-634-6340. E-mail: calvin.coolidge@parkerbriggs.com