When it comes to selling their life’s work, business owners want to know the ins and outs to make sure they’re knowledgeable and are able to reach their selling goals. From deciding whether they actually want to sell to navigating the complexities of a sale, it’s imperative business owners have a qualified Advisor on their side to make informed decisions and alleviate the stress that comes with selling.
Advisors bring a wealth of insight and expertise when preparing business owners to take the next step. During the decision-making process, there are three common questions that M&A Advisors are frequently asked:
- How much is my business worth?
- What is the market for selling my business right now?
- What’s the process/how can you help?
Below, we provide some insight into these questions commonly asked.
How much is my business worth?
When it comes to the valuation of a business, business owners can find an accurate amount their business is worth by performing a business valuation, which attempts to figure out a company’s current value and considers assets, the likelihood of future cash flow, and other factors.
Additionally, there are four methods to achieve a legitimate valuation estimate— the Actual Book Value Method, Public Stock Market Comparables, Transaction History, and Discounted Cash Flow. While each of these methods will enable business owners to come up with a fair market opinion of the business, it’s imperative to get a closer examination from experts to ensure the value is not exaggerated or undervalued.
What is the market for selling my business right now?
Q1 for M&A in 2023 deals began with a plodding start, with global deal volume ranking at $559 billion— the third-lowest global quarterly M&A deal volume in over a decade. Economic uncertainties, including inflation and interest rate hikes, a small-scale banking crisis, and geopolitical turmoil, have caused valuations to be lower, buyers to be more cautious, and the debt market for funding to be tighter.
That said, there is still a very active market for quality deals. Qualified, profitable, best-in-class companies will still find multiple buyers eager to complete a sale. Business owners must do what they can to strengthen all business areas before going to market.
With the right Advising Team on their side, business owners will be able to pinpoint areas of weakness and work to put plans in place to ensure they appear solid and favorable when selling. Advisors know what buyers value most and are able to take a deep dive into all operational aspects to identify areas needed for improvement.
What’s the process/how can you help?
At Aberdeen, we’ve created and refined a proven six-step process designed to help business owners find the right buyer and— ultimately— get the highest sales price for their business. Our network of qualified buyers allows us to actively search for multiple offers, ensuring you get the best price. Our proven six-step process is broken down as follows:
- Strategize– Beginning with a business valuation, we analyze a variety of key issues, including financial performance, seller expectations, positioning, customer concentration, management team, transition, and final exit strategy.
- Position– We develop confidential marketing materials designed to intrigue and motivate ideal buyers.
- Market– Through a careful screening process, we pinpoint ideal buyers, discreetly distributing marketing materials and monitoring buyer interest through confidential discussions.
- Negotiate– The Advisor Team guides business owners through the process of handling multiple offers, identifying opportunities and pitfalls. They move multiple ideal buyers toward more substantial offers, generating the highest value for your business.
- Deliver– During the due diligence process, about half of all deals fall apart. Aberdeen navigates this delicate process with the skills and organization necessary to deliver a signed purchase contract.
- Close– Sellers can pursue the goals that brought them to the Aberdeen Team in the first place. They’ll happily walk away with the highest value for their business.
At Aberdeen, we’re committed to helping business owners navigate the complexities of selling a business and finding a buyer at the right price. The M&A market, and selling a business in general, is one that no business owner should have to figure out alone. If you’re interested in selling your business, contact our Aberdeen Team for a free consultation on how we can help.