Are you asking yourself: “How do I sell my business?” In our experience, the most successful business transactions have three key elements:
- Buyers must see the potential of the business;
- A strong buyer pool creates a competitive market which yields the greatest probability of success;
- Projects must not lose momentum.
That is why we follow a specific process that begins with thorough pre-sale planning. During the pre-sale planning, we focus on understanding our client's motivations, goals, and objectives. Next, we focus on understanding the individual characteristics of the business. We strive to uncover areas of strength and opportunities for growth in an effort to properly stage the business in our confidential marketing materials.
The momentum created from proper preparation is essential during the third phase, buyer identification. Our goal is to uncover the greatest number of qualified, interested buyers in the shortest amount of time. The strong buyer pool creates competition and allows us to leverage the buyers against one another. This is why we do not set an asking price on our business listings. We build a marketplace and allow it to dictate the purchase price, often above what a traditional valuation would indicate. Buyer identification is where Calder truly stands alone. The process of disseminating confidential information and professionally following up with buyers has traditionally been (and is for most firms) a very manual, labor-intensive process subject to errors, lack of oversight, and mismanagement. The following is part of Calder's magic, which has lead to us becoming a top-closing firm in the Midwest, that consistently breaks our own closing records.
So, How is Calder Different?
- Buyer Network: Calder has developed a large and constantly growing network, currently at 55,000+ prospective buyers, professional advisors, and business owners. When it’s time to market a business, this buyer network is absolutely invaluable; oftentimes we qualify 50-60 buyers and receive their signed NDAs within the first day of being live on the market. This is critical considering that 90% of initial buyer interest will not result in subsequent action towards a purchase, regardless of the source. As our founder, Max Friar likes to say, "If you want to get to 5 offers, you have to be in front of 50 solid buyers."
- Central NDA Processing: Calder has automated and centralized the NDA dissemination and collection process, which captures all potential inquiries from the buyer outreach and ensures that confidential information remains under lock and key until the proper protocol is followed. The system automatically follows up with prospective buyers multiple times who receive but do not sign the NDA in efforts to obtain the largest buyer pool possible. One person is specifically charged with reviewing, processing, and filing all signed NDAs. Centralization of this process is critical not only from an efficiency standpoint but also because it dramatically reduces potentially disastrous confidentiality breaches that often occur when no one specific person is accountable and responsible for this critical function.
- Buyer Screening & Approval: All buyers that inquiry about Calder clients are required to answer basic qualifying questions including 1) How much available capital do you have? 2) Why are you interested in this particular opportunity? 3) What is your time frame? and 4) Please provide your resume or LinkedIn profile link. Subsequently, Calder has the ability, as requested, to allow our client to individually approve every prospective buyer inquiry prior to the dissemination of confidential information. Additionally, Calder utilizes a background checking service to ensure that any given buyer's background is clean. Calder will prequalify a large list of strategic outreach targets compiled prior to launch to make sure the process runs as efficiently as possible. Calder employs many checks to ensure confidential information is closely held and distributed only to buyers that have passed a number of required and automated checkpoints.
- Advanced CIM Distribution & Tracking: Calder has automated and centralized the Confidential Information Memorandum (CIM) distribution process via our advanced CRM. In a nutshell, our automation ensures that information gets to the right buyers and that our Advisors follow up multiple times with every qualified buyer. Most other M&A firms distribute and track NDA and CIMs using fax, manual email, and excel spreadsheets. Not only is this time-consuming and inefficient but leads to the potential for devastating human error – not properly receiving or filing a signed NDA or failing to properly follow up with buyers, which is the #1 complaint from buyers in the industry.
- What's the Point? A Focused Advisor and Protected Client: Aside from speeding up the deal process and maximizing the protection of confidential information, Calder’s automation allows our Advisors to focus their attention entirely on prospective buyer interaction, answering questions, and developing the largest pool of buyers to maximize value in a private limited auction. Advisors at other firms typically spend 30-40% of their time bogged down in bureaucratic paperwork and mindless manual tracking. At Calder, Advisors spend 100% of their time working towards successful sales and 0% of their time on administrative tasks.
After the best buyer has been selected during phase 4, we coordinate the necessary components to consummate the transaction.
PHASE 1:
PRE-SALE PLANNING
Identify Owner Goals and Objectives
Prepare a Business Valuation, Marketing Plan & Timeline
Engagement with Client
PHASE 2:
MARKETING
Prepare Confidential Marketing Materials highlighting Growth Opportunities
Prepare Strategic Buyer List
Finalize and Approve Blind Overview
Launch to Market!
PHASE 3:
BUYER IDENTIFICATION
Market your Company on a Confidential Basis
Secure Non-Disclosure Agreements from Potential Buyers
Qualify Potential Buyers prior to Business Introduction
PHASE 4:
NEGOTIATIONS
Schedule and Conduct Site Visits
Secure Multiple Qualifying Offers
Analyze Terms and Negotiate Best Terms
PHASE 5:
CLOSING THE TRANSACTION
Assist Buyer in Arranging Necessary Financing
Coordinate the Due Diligence Process
Work with your Attorney to Coordinate Final Purchase Documents
During Phase 4, Calder Advisors work diligently to introduce you to top-quality buyers. Oftentimes, this introduction takes the form of introductory conference calls and on-site visits. Calder is extremely cognizant of protecting the confidentiality of these introductions. As part of the pre-planning discussion, we will discuss with you the best times and circumstances to allow prospective buyers to visit your business and meet you so as to minimize the possibility that employees or vendors could become suspicious.
Site visits often occur after hours or on weekends. For businesses that have very little downtime (for example, those running 3 shifts), meetings can be arranged at our office or an off-site location such as a hotel meeting room.
Generally, after site visits, buyers have additional questions. Shortly thereafter, the buyers generally conclude that they are either no longer interested or that they would like to take the next step, which is submitting an indication of interest (IOI) or a letter of intent (LOI). While it is always definitively clear that Calder is working as a fiduciary of the seller, we often assist buyers in the creation of their offers. This is primarily because many buyers, whether corporate or individual, do not have tremendous experience with purchasing companies and our assistance can expedite the process and ensure that irregular items are not included and issues like working capital are addressed properly to reduce future confusion.
During this Phase, Calder works expeditiously to obtain multiple offers. While this is not always possible, receiving multiple offers not only gives our client choices among buyers but arms the seller with potentially significant negotiating leverage. This negotiating leverage does not extend to price only but can help significantly with deal structure, timing, and transition items.
Once an LOI is executed, the process moves to Phase 5: Closing the Transaction.
During Phase 5, Calder's role transitions to deal quarterback in three primary ways:
- Assisting the buyer in arranging financing. As indicated above, oftentimes buyers are unfamiliar with acquisition financing. Fortunately, Calder has a large network of qualified lender partners that are perennially eager to work with buyers to get transactions financed. Calder introduces buyers to lenders and can assist the buyer in becoming organized with their records and the required paperwork.
- Coordinating due diligence and legal. In this respect, Calder facilitates the flow and organization of information so that the buyer, seller, and their respective legal counsel have the information and answers to questions that are required to get the transaction to the finish line; and
- Remaining a trusted advisor. It is not uncommon that emotions can run high during the closing process. Fortunately, it is much more common that a buyer or seller does not understand a part of the process and therefore becomes distrustful that either party may be trying to pull a fast one. Despite this, buyers and sellers can become distraught when issues inevitably arise. Calder's Advisors have closed dozens of transactions and can be a steady hand and voice of reason when and if the waters become rocky.
For more information about our process or to meet with one of our experienced advisors, please complete our contact form.