Bag ... I'd love to help you any way I can, starting with a casual introductory call, and even a free business market valuation to give you an idea where you sit today, and what you need to do to get where you want to be. Feel free to email me at the address below.
And here's some feedback on your questions ...
Hope all that was helpful ... I'd love to talk if you'd like to pick my brain in more detail.
Good luck!
And here's some feedback on your questions ...
- Where do I look to find a buyer? The trick here is "eyeballs" ... the more people that see your acquisition opportunity, the better. It helps you rest easier because you know you've exhausted as many options as possible, and it also helps ensure you're getting the best possible value. I'm going to toot my own horn here, but using a business broker or M&A advisor is going to provide exposure to the highest number of potential buyers.
- What is a realistic multiple to hope for? The answer here is "it depends." I know that's not overly helpful, but there are literally dozens of different factors that ultimately determine the valuation multiple for a specific business. The two biggest are EBITDA size and industry. It's hard to give you a multiple range with any accuracy based on the info provide above, but like I said, I'd be happy to provide you with a free business market valuation analysis, which will nail down the answer to this question for you in great detail.
- What kind of offers should I look for and shy away from (stock, cash...)? That's a tough one to answer without knowing more about your personal situation and the business operation. As a general rule, business your size are acquired through asset sales, as opposed to stock sales. The good news is that your business appears to be the right size for a buyer to be able to obtain an SBA 7(a) loan to acquire it, which means there will be little-to-no seller financing (10% of the sale price, max, in most cases), so you would walk away from closing with the majority of your purchase price in cash.
- What is a realistic timeframe I should plan for the transition for the integration of this company into another company? This depends greatly on the buyer. For example, if you have a strategic buyer within your industry that is going to consolidate your operation into their own, they are going to require less of a time commitment from you than, say, a buyer from outside of your industry that is more likely to ask you to remain with the business for multiple years to operate it. Then again, a strategic buyer might also ask you to stay long-term in some sort of management role if they see you as an asset to their growth plans. My advice when it comes to transition plans is to start by determining what you want post-closing and are willing to do, and then we promote the acquisition in that manner and look for buyers that are agreeable to those arrangements.
- What else should I consider? It's absolutely great that you are starting to contemplate all of these questions a couple of years before you're ready to sell. Too many business owners wake up one day and decide they want to sell, only to find out very quickly that they were neither mentally nor emotionally ready to do so, and the business wasn't ready either. So they end up selling for less than they could have had they properly planned an exit, or they continue working with one foot mentally out the door.
Hope all that was helpful ... I'd love to talk if you'd like to pick my brain in more detail.
Good luck!
jeremy@northstar-mergers.com