Edison Business Advisors offers the following sell-side services:
- Business Sales
- Full and Partial Recapitalizations
- Joint Ventures
- Mergers & Acquisitions
- Employee Stock Ownership Plans
- Business Valuations
- Equipment Appraisals
- Commercial Properties
- Exit Plans
If you are considering selling your business, you most likely have many questions. Our Selling Guide answers the most commonly asked questions when selling a business. Our seller articles and videos provide excellent information pertaining to selling a business. If you have additional questions, please contact us for a complimentary, confidential consultation.
Edison Business Advisors have invested their time and money in education, certifications, and industry best practices in order to perfect our process and achieve tremendous returns for our clients. As a result, our sales process, outlined below, has successfully transacted businesses at a much higher rate than the industry average. If you have any questions about our process, please contact us for a complimentary, confidential consultation.
- Three years of financial statements including:
- P&L's and latest balance sheets.
- Tax returns.
- Leases (property and equipment).
- Asset list.
- Other documents upon request.
2. FINANCIAL RECAST
Based on the size of the business, we will calculate:
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for deals over $1M EBITDA.
Seller's Discretionary Earnings (SDE) for businesses under $1M EBITDA; SDE is the pre-tax and pre-interest profits before non-cash expenses, a single owner's benefits, one-time investments, any non-related income or expenses, and any expenses a new owner will not be responsible for.
3. VALUATION AND PRICING
We value and price the business based on standard Certified Business Appraiser methodologies and adjustments. See our Valuation Methodology page for detailed information:
- We calculate a business's value using the Asset-Earnings Method, Capitalized Earnings Method, Net Asset Value Method, Capitalization of Attributes Method, Direct Market Data Methods (Revenue Multiple and EBITA or SDE Multiple), and when a business plan with forecasted financials are available the Discounted Future Cashflows Method.
- Industry multiples are obtained from sold databases such as Business Brokers of Florida (BBF) Multiple Listing Service, DealStats, PeerComps, and BizComps. We have access to all of the most popular sold comps databases in the industry. We also have access to a number of valuation software programs with built-in multiples.
- These methods and tools are used to calculate a Most Probable Selling Price (MPSP).
- Adjustments to the MPSP are made based on industry popularity, asset values, inventory, buyer perceived defects/risk factors, willingness to accept seller financing, etc..
- We verify our adjusted MPSP with a thorough analysis of the buyer's required income, Small Business Association (SBA) lender debt coverage, and a Return on Investment (ROI).
4. LISTING AGREEMENT
We use a standard Business Brokers of Florida (BBF) listing agreement:
- Our listing term is preferably 12 months; the average time to sell a business is between nine and 12 months.
- For businesses under $1M, our commission structure is typically 10% with a $10,000 minimum; 12% with a $12,000 minimum for franchise resales.
- For businesses over $1M, we use a Double-Lehman structure; 10% on the first million, 8% on the second million, 6% on the third million, and 4% thereafter.
Our objective is to maintain confidentiality in our public information, e.g., ads, teasers, and other blind information circulars while answering as many of the frequently asked questions by buyers in our Confidential Business Review (CBR):
- Ads, Teasers, and our Blind Listing Information (BLI) sheet are designed to maintain the confidentiality of the seller while providing just enough information to prospective buyers to ensure the business is approximately what they are looking to purchase.
- A Confidential Business Review (CBR) is provided to the buyer after Step 7 below. The CBR is written to answer as many of a buyer’s basic questions about the business in order to ensure the business is a match for what they are looking to purchase prior to wasting the seller’s time with an unproductive, unnecessary meeting.
We aim to maximize the exposure of our ads to the right audience. We engage in both passive and active marketing programs:
- Appropriate website ads are placed based on the size of company and industry; e.g., BizBuySell, BizQuest, BusinessBroker.net, etc. for smaller deals; and DealStream, Axial, Divestopedia, DealGate, DealNexus, Aurign (formerly BankerBay), etc. for larger deals. We also use other industry platforms when appropriate, e.g., Restaurants-For-Sale.com, etc..
- Ads are re-entered monthly on platforms such as BizBuySell and BizQuest to move ads back to the top of the industry and geographic searches.
- Frequent social media ads are placed on LinkedIn, Twitter, and Facebook.
- We send weekly emails to thousands of qualified buyers of the businesses listed in the previous week.
- We execute targeted marketing campaigns as agreed upon with the seller, e.g., direct mail, email, and/or telephone solicitation based on targeting of like-kind or adjacent business owners by geography, prospect size, etc..
7. HANDLING INQUIRES
Buyers are vetted to help ensure they maintain confidentiality and are capable of purchasing and successfully operating the business (see our Confidentiality page for more information):
- All buyers must sign a Non-Disclosure Agreement (NDA); no exceptions.
- All buyers must submit acceptable evidence of financial viability and a summary of their applicable experience for businesses priced over $100K.
- We work with sellers to set up an approval process before we release a CBR. The approval process may include the seller's approval based on geographic proximity, buyer’s industry, etc..
- Monthly email to give an update on inquires.
8. OFFERS, DUE DILIGENCE, AND FINANCING
Many deals are lost during the due diligence phase. Proper preparation as outlined in Steps 1 through 5 and industry-leading methods and tools to facilitate due diligence has resulted in very few lost deals by Edison Business Advisors:
- All written offers are presented to the seller within 24-hours of receipt.
- Due diligence document management is facilitated with a secure data room.
- We assist with lease and license transfers and can recommend professionals who specialize in assisting with the more difficult license applications.
- We can provide buyers and sellers a selection of competent lenders, escrow agents, closing attorneys, etc..
Once due diligence, lease, financing, and any other contingencies are satisfied, closing documents are drafted for review:
- We always recommend the buyer's and seller's legal counsel review the closing documents.
- Once the review is completed to all parties' satisfaction, the closing is scheduled and business ownership is transferred.
- Post-closing, sellers are expected to assist the buyer in transitioning the business.
- The transition period can be as short as a few days or considerably longer depending upon the complexity of the business and/or the needs of the buyer.
If you are considering selling your business, please contact us for a complimentary, confidential consultation. We have buyers throughout the US and overseas.
Main Street and Lower-Middle-Market Businesses
- CORPORATE OFFICE
- 8891 Brighton Lane, Suite 105
- Bonita Springs, Florida 34135