Transaction Marketing and Execution

Selling Your Business

Calculating the Value of Your Business

80% of Business Owners do not know the value of their business.

%

Of Business Owners Do Not Know The Value of Their Business

%

Of Business Owners Do Not Manage Their Business To Value

%

Of Business Owners’ Net Worth Is In Their Business


The process

We’ve Been In Your Shoes

We understand the challenges of selling a business and respect your accomplishments. As a business advisor, our team will support you throughout the process, so you can exit on your own terms. Whether you’re a seasoned entrepreneur or a first-time business owner, our dedicated Broker to Sell My Business service is here to guide you every step of the way. Let us help you achieve your goals.

Preparation

This often begins a couple of years prior to a sale. We will analyze historical performance of the company and ensure that it supports the company’s revenue and profit projections; assist in the identification of all potential EBITDA adjustments; review and assist with refinement of critical company sales and operational information. Where there are areas that need your focus to maximize sale value in the months and years ahead, we will make specific recommendations.

 

Value Positioning

Brentwood Growth will assess and advise the company about how financial performance and valuation are likely viewed by the market. We will work with management to demonstrate how the company’s core strengths represent value-add or value creation to potential acquirers. We will consider all three buyer groups (financial, strategic, and owner/operator) while considering SBA funding parameters to determine different ways a sale could be financed. We will give you a specific value range and the assumptions behind that range.

 

Marketing & Qualifying Buyers

We will prepare all the marketing materials, work with you to identify which of the three buyer groups (financial, strategic, and owner/operator) are appropriate, and then execute the listing strategy. Utilizing proprietary databases built through the years, subscribed portals, and offshore resources, we will obtain maximum exposure. We will vet and qualify potential buyers, then negotiate an appropriate term sheet. We will keep the distraction away from you and only introduce you to vetted buyers.

 

Managing Diligence

We understand the importance of preserving value for your company during the due diligence process. With our extensive experience in managing buyer’s due diligence, we take a proactive approach to mitigate risks and manage potential purchase price adjustments. With Brentwood Growth on your side, you can have confidence that your company’s value is protected throughout the due diligence process.

 

Negotiating The Transaction Documents

We will work with company management and legal counsel to identify critical areas in the documents to make sure the ‘deal’ is not eroded by Reps and Warranties. We will ensure that the Reps and Warranties are reasonable and represent the ‘market’.

 

Get The Transaction Closed

We will work with management, lawyers, and the buyer to achieve timely completion of transaction documents, thereby guiding management in the completion of transaction disclosure schedules. We will stay on top of the buyer during the process to drive timely execution.

 

John Bartlett, Founder, Brentwood Growth

OUR METHODOLOGY HAS A PROVEN TRACK RECORD

Who Are the Buyers?

Brentwood Growth will review each of the following three groups with you to achieve the maximum exposure, visibility and value.

Each group has characteristics and objectives that are unique with pros/cons.

  • Identify which groups make sense to market your business to.
  • Utilize our proprietary databases we’ve built through the years.
  • Build your company’s strategic lists.
  • Subscribe to portals to obtain maximum exposure and interest.

3 Types of Buyers

FINANCIAL BUYERS

  • Consolidators backed by private equity firms
  • Buying companies in various sectors that meet their profile
  • Merging them into larger companies
  • Improving the business for larger revenue growth, expanding service lines, improving operational and financial efficiency, supporting recruiting and retention
  • After 5-7 year holding period selling consolidated platform as one large company
  • Either need owner to stay to run the business, have management in place or hire management

STRATEGIC BUYERS

  • Increase existing market share from existing or complementary products or services
  • New markets, customers or geographical footprint
  • Merge back office with existing operations achieving cost synergies
  • Could operate as stand-alone or consolidate into existing operations
  • Similar business in different geographic market that want to be in your geographic market or complementary business in same geographic market that want to add your services

OWNER / OPERATORS

  • Individual buyer that will be active day to day management
  • Will replace current owners responsibilities
  • Looking for solid, consistent cash flow performance with growth potential
  • Returns based on consistent cash flow to fund owner/operator compensation as well as investment in company to drive growth and valuation enhancement
  • Deal Structure likely to include SBA financing and/or “Seller Financing”

Brentwood Growth Process

1

Initial Call

Brentwood explains the process, you give a high level overview of the business, we learn about the business and what you are considering, we provide a timeline.

Financial Exchange for Business Valuation

NDA signed, limited financial information exchanges, Brentwood completes an initial valuation of what the business is worth.

2

3

Valuation Presented

Brentwood presents valuation findings, gives valuation range, discusses buyer groups, transaction structure and transition timeline acceptable.

Listing Agreement Signed

If we all agree and the valuation range is acceptable, timing is right, and we are a mutual good fit then a listing agreement is signed.

4

5

Marketing Materials and Marketing Plan

Brentwood prepares a one-page summary (Teaser), a 20–25-page Confidential Information Memorandum (CIM), a marketing strategy as to what buyer(s) groups and specific buyers to present the business to.

Initial outreach to buyers

Based upon buyer(s) groups and buyers, Brentwood reaches out and presents teaser and CIM to interested buyers. Initial calls and questions answered about the business.

6

7

Management calls with vetted buyers

Brentwood arranges management calls with subset of those potential buyers that we believe are potential good fits, obtain Indications of Interest (IOI) and Letters of Intent (LOI).

LOI selected and executed

Brentwood will guide seller in selecting the LOI that is your best fit and it will be executed. This agreement provides a specific period of exclusivity for the buyer and is non-binding.

8

9

Due Diligence – Financial

Brentwood oversees financial due diligence also known as Quality of Earnings. This is a deep-dive financial analysis that a buyer conducts usually by hiring a third-party to access the reliability and sustainability of the selling company’s reported earnings.

Due Diligence – Legal, Operational and Commercial

Brentwood oversees additional due diligence areas: 

  • Legal (contracts, agreements, litigation history, intellectual property rights, regulatory compliance, and other legal aspects)
  • Operational (processes, systems, management structure, key personnel, suppliers, customers, and competitive position)
  • Commercial (market dynamics, industry trends, customer base, competitive landscape, and growth potential of a business)

10

11

Legal Contract Review

Brentwood oversees and coordinates all legal contracts to be executed at closing. Seller’s outside counsel to be engaged as well.  

  • Acquisition AgreementThis is the primary contract that formalizes the terms and conditions of the acquisition.
  • Disclosure Schedules These are attachments to the acquisition agreement that list exceptions to the representations and warranties made by the seller.
  • Employment Agreements – Key employees to define their roles, responsibilities, compensation, benefits, and post-employment obligations such as non-competition and non-solicitation clauses.

Day 240 – 8 Months From Listing Agreement Signed

Brentwood will coordinate execution of all final agreements as well as transfer of consideration, ownership and assets.

FAQs

Answered by Expert Business Advisors

How is the value of my business calculated?

It comes down to two numbers:

  1. Free cash flow the business generates
  2. Multiple of that cash flow a buyer is willing to pay

Importance of Business Valuation

What is the process?

Our team will support you throughout the process, so you can exit on your own terms. Let us help you achieve your goals.

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What is EBITDA or free cash flow?

For our purposes EBITDA and free cash flow are basically the same. It is the cash flow the business will generate to the buyer without the owner(s) associated compensation, expenses being run through the business and all one-time expenses added back.

What determines the multiple a buyer will pay?
Size of the EBITDA / cash flow

Amount of new construction and project based work

Amount of service and maintenance work

Revenue growth year over year

Marketing reputation management

Lead generation program

Size of technician crew

Business runs independent of owner involvement

ABOUT BUSINESS VALUATION

Do I have to sell 100% or is a partial sale possible?

Either is possible. It depends on your timeline / objectives, who the buyer is and what their plans are with the business. By having a partial sale you are able to “pull some chips off the table” continue to run and grow the business then sell the remaining piece down the road with a clear exit and transition plan.

How long does it take to get a transaction completed and will I be required to stay on post sale?

A transaction takes around 6 months to complete and the buyer will want to structure a transaction that meets your objectives. If that means work with you for several years great, if that means leave quickly then that is fine also. Whatever works for you and the buyer.

Who are the buyers for companies like mine?

National and regional consolidators backed by private equity firms looking to buy smaller companies and merge them into a larger company Strategic Buyers – companies in same sector wanting to expand into your geo market or companies in same geo market wanting your service lines. Owner / Operator – younger version of you. Someone wanting to buy a business, replace your responsibilities, run and grow it for next 10+ years. ABOUT BUYER GROUPS

How will my employees be treated post sale?

The buyer certainly needs them to stay and help run the business. In many instances the pay, benefits and potential for career advancement actually improves as they become part of a larger company.

Is this interest in home services and facility management companies a bubble and how long will it last?

The buying and consolidation will continue for at least several years, the current valuations paid is anyone’s guess.

How does Brentwood Growth get paid?

We are paid a success fee at closing if and when the transaction is completed.

The range of the fee varies based upon the size of the transaction. There is no retainer or monthly support fee during the process.

We only get paid if a deal is completed. Our pricing model is based on industry accepted Double Lehman scale.

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Am I locked in once we start the process?

You are never locked into a commitment to the process or with us. If at any time you change your mind or are not satisfied with our performance, you can cancel the agreement and nothing is owed. Furthermore, if you are not satisfied with any offer or any buyer you are under no obligation to accept the offer.

What is a Business Broker?
A business broker serves as an intermediary between a business owner (the seller) and the buyer.

A sell-side business broker represents the seller and works on their behalf; a buy-side business broker represents the buyer.

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Contact Us

Don't Hesitate, Ask Any Question

80 Claremont Road Unit 801 Bernardsville, NJ 07924

1990 Main St Suite 750 Sarasota, FL 34236

1177 Avenue of Americas 5th Floor New York, NY 10036

908 377-7807