Selling a 30 year old Business. Strategies? Planning?

[Darkearth]

I'm looking for some feedback/strategies/ideas for someone trying to go through the process of selling a local small business. My dad is trying to retire and I want to help him get the most that he can for his company that he grew and managed himself for the past 30 years.

Some of the obvious things that come to mind is prepping the last 5 years of book keeping, payroll, tax returns, gross/net income. Should there be any other obvious things that I should be helping him get ready?

Any recommendations on advertising the actual sale of his business other than listing on some of these business sale websites? As well as any tips for negotiating with potential buyers?

If it matters this is in the South Florida area.

Thanks in advance

 

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[biophase]

Does this business rely on him or his skills? If so, you should be finding ways to answer questions about those issues.

 

[Darkearth]

Does this business rely on him or his skills? If so, you should be finding ways to answer questions about those issues.

Thankfully his position within the business can be hired out and replaced. But yeah drafting up a list of his job duties and responsibilities for prospective buyers is a good thought, thank you.

 

[steve schweitzer]

I'm looking for some feedback/strategies/ideas for someone trying to go through the process of selling a local small business. My dad is trying to retire and I want to help him get the most that he can for his company that he grew and managed himself for the past 30 years.

Some of the obvious things that come to mind is prepping the last 5 years of book keeping, payroll, tax returns, gross/net income. Should there be any other obvious things that I should be helping him get ready?

Any recommendations on advertising the actual sale of his business other than listing on some of these business sale websites? As well as any tips for negotiating with potential buyers?

If it matters this is in the South Florida area.

Thanks in advance

As someone who has sold a business I can tell you that if he cannot walk away and the business still run fine without him, he has NOTHING TO SELL except a customer list and the depreciated assets.

If he has to be there for the place to operate then he just has a job, not a business.

The number one thing he need to do is work himself out of the day to day operations.

Also, he will need to show a track record of this system working with management for a while (like a couple years) before any potential buyer is going to consider this a business worth buying.

 

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[Itizn]

What I've learned undergoing a similar task:

You can be a small and local business and have some very enticing assets (vehicles, machinery, etc.).
or
you can be a small and local business and not have any real enticing assets at all (bookstores, flower shop, etc.)

You didn't detail what type of industry this is for, but if this for the former, keep in mind a lot of people will just look toward the asset available, and if it appeals to them enough, that can influence the purchase.

Assuming that loosely applies to your fathers business, my advice would be to get as thorough as can be when it comes to compiling and presenting said assets. Make a proper excel sheet, as much data and specs as you can document. Take high quality pictures and videos and disperse that amongst the proper channels. That should gather significant interest.

Good luck.

 

[Darkearth]

As someone who has sold a business I can tell you that if he cannot walk away and the business still run fine without him, he has NOTHING TO SELL except a customer list and the depreciated assets.

If he has to be there for the place to operate then he just has a job, not a business.

The number one thing he need to do is work himself out of the day to day operations.

Also, he will need to show a track record of this system working with management for a while (like a couple years) before any potential buyer is going to consider this a business worth buying.

A harsh reality but a very sound one. Thank you for the input. We will see about trying to lay the groundwork for him leaving before entering into discussions with buyers.

 

[Darkearth]

What I've learned undergoing a similar task:

You can be a small and local business and have some very enticing assets (vehicles, machinery, etc.).
or
you can be a small and local business and not have any real enticing assets at all (bookstores, flower shop, etc.)

You didn't detail what type of industry this is for, but if this for the former, keep in mind a lot of people will just look toward the asset available, and if it appeals to them enough, that can influence the purchase.

Assuming that loosely applies to your fathers business, my advice would be to get as thorough as can be when it comes to compiling and presenting said assets. Make a proper excel sheet, as much data and specs as you can document. Take high quality pictures and videos and disperse that amongst the proper channels. That should gather significant interest.

Good luck.

Thanks for the input. The business is a tree service company, basically like a lawn care company but for trees. So going by your details it would more fall under the first category as he does have a number of assets, vehicles, equipment ect. I will work on compiling a list of these assets, thank you.

 

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[biophase]

Thanks for the input. The business is a tree service company, basically like a lawn care company but for trees. So going by your details it would more fall under the first category as he does have a number of assets, vehicles, equipment ect. I will work on compiling a list of these assets, thank you.

So his main asset is his current customer accounts and equipment.

 

[Darkearth]

So his main asset is his current customer accounts and equipment.

Correct.

 

[peddletothemetal]

The ultimate asset is the business itself and the cashflow it generates, right? Especially a labour intensive services business. They only "sell" for the value of hard assets if liquidating, pennies on the dollar if anything. So not sure why the first concern being mentioned are the assets the business owns rather than itself as the asset.

But what another poster said was key: to maximize its sale value it needs to be like a self contained product sat on a shelf, all polished looking, running independently of the owner.

Just be careful though. I've seen an owner try the hire a GM to replace me route, and the guy ran the place into the ground.

Another option is, depending on how many staff and how long they've been there is a "buy in", where the owner sells to long term employees. The book "How I sold my business" details such a story, impressive in that the guy sold a services business with two other partners to the next rung down of employees.

I'd say the first step is to get an accountant to go over the business and do a basic audit, telling them you'd like to get it ready for sale and ask them what problem areas should be addressed.

I wouldn't fully DIY a once in a lifetime sale with no prior experience. Pay for at least some professional advice.

 

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[Redcable]

I read "Never split the difference" by Chris Voss to improve my negotiation skills. It's a fun read.