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Category: Business Broker Newsletter

The Montana Group's Advantages
Business Broker Newsletter, Business Brokerage Consultant

The Montana Group’s Advantages

Jun 4, 2017 by The Montana Group 0 Comments

The Montana Group’s Advantages:

•    No Retainer – therefore we will not accept a business listing unless we feel comfortable in our ability to sell your company at a price acceptable to you.

•    Business Evaluation – we will gladly provide a complimentary business valuation for those businesses with a minimum of $1 million of annual pretax profits.

•    There are no associates to work on selling your business. All Partners involved have a minimum of 15+ years of experience selling profitable operating businesses.

•    Accounting: The Montana Group provides without charge a recast of your business’ Income Statement and Balance Sheet. This enhances the value of your business by increasing your cash flow, the most influential component to pricing a business.•    Our database of prospective buyers exceeds 600, each with at least $50 million raised to invest. We also have the ability to source those potential buyers within a particular business sector.

•    We recommend that the Seller continue operating the business as usual and let us use our nineteen years of experience ushering the process toward the goal of our client.

•    Our Fee Structure is designed to exceed the Seller’s expectation. The Montana Group receives an increased percentage once the transaction exceeds the Seller’s acceptable price.

The Montana Group has since 1991 worked with business owners that are interested in selling all or a large part of their business. We know where to go to sell them and how to present the necessary material in the optimum way. We will suggestion proven methods to enhance the overall proceeds at closing.

Issues to Consider When Structuring a Business Sale
Business Broker Newsletter, Business Brokerage Consultant

Issues to Consider When Structuring a Business Sale:

Apr 30, 2017 by The Montana Group 0 Comments

Of course, the cash received at closing is the single most important consideration however there are many other issues, which we encourage our clients to consider:

  • Any unusual business agreements, issues, or relationships that need to be addressed with the buyer before the closing?
  • Is there an interest in retaining any ownership?
  • Is there an interest in continuing to run the business post-sale? If so, what is the preferred amount of time?
  • Is there an interest in receiving a seller note as part of the overall sale proceeds?
  • Would you object to selling to a competitor, as they will know of your customers, your margins, your employees, and your method of operation BEFORE the sale is completed?
  • Is there a preference to sell to a buyer who will need your staff? If so, a competitor may not need them as your operation could be folded into their existing operation.
  • Any assets on the company balance sheet that are not essential to the operation of the business that you would like distributed to you?
  • Is there a Profit Sharing Plan distribution or rollover that needs addressing?
  • Are there any tax considerations from the sale that would be prudent to discuss with an advisor before the sale?

The Montana Group does not charge a retainer so its success-based only fee is motivating and mutually beneficial. Contact us for a complimentary valuation. In our 26 years we have many many successful transactions that started with a similar introduction.

Selecting a Representative to Sell a Business
Business Broker Newsletter, Business Brokerage Consultant, Uncategorized

Selecting a Representative to Sell a Business

Apr 13, 2017 by The Montana Group 0 Comments

This sale is probably the family’s most financially significant occurrence, which will likely affect several generations. So, what are the important and ultimately valuable issues to consider when selecting a consultant to focus on the sale of a business?

Experience: How many transactions has the representative successfully closed? What is the sale price range of the bulk of these transactions? What industries or specific focus are these sold companies?

Buyers: Where does the representative locate the potential buyers? What is their existing buyer database focus and how many? Can additional buyers supplement those obvious industry buyers to provide an outside perspective on value and also create competition?

Failed Transactions: Of the transactions that were listed and did not sell what cause these outcomes?

Past Sellers: Provide a list of completed transactions and the contact information for 4-6 that are available to be contacted for a reference.

Upfront Cost: Is there a retainer? Why is it necessary to pay without knowing the outcome?

Fee Schedule: Is the fee schedule formula very motivating for the representative? There should be a much larger percentage to push the price beyond an acceptable minimum.

Listing Agreement: Is the agreement cancellable at any time without penalty? If the negative outcome is apparent then why not move on?

Referrals: Does the consultant have well-qualified and experienced specialist such as merger and acquisition attorneys to recommend that have worked closely with them in the past? Wealth managers? Accountants?

Confidentiality: Would the consultant agree to provide a list of potential buyers that need pre-approval before contacting?
Issues: What operational or financial issues of the company could hold the price down and what are their recommendations to combat these?

Current Conditions for Selling a Business
Business Broker Newsletter, Business Brokerage Consultant

Current Conditions for Selling a Business

Mar 12, 2017 by The Montana Group 0 Comments

There are a number of cyclical factors that affect the optimum time to sell a business. Of course, is the business doing well? Are the revenue and sales trends upward? Does the future look bright? Other factors include the motivation and industry focus of buyers, as well as, their funding rates and availability.

Currently (2017), the private equity buyers are numerous, well funded with unused cash, and a hungry appetite left over from the slow years of the recent recession. This coupled with historically low interest rates and an easing of commercial borrowing make the demand side of the transaction very favorable to a seller. IF the potential seller’s business is preforming well then now is a great time to sell. Performing well means are the business’ earnings growing from increasing sales, are the continued growth opportunities likely and evident, and are the product or service margins not contracting. When these factors are inline the seller’s representative is in a position to sell the business on the present and also on the near term future rather than on a historical earning formula which includes recessionary years that would reduce the sale price.

An accomplished business brokerage consultant like The Montana Group (www.montanagroup.com) will know of the best method for selling the business. Occasionally, the most advantageous buyer is a company within the selling company’s focus. This is known as a strategic buyer as there are strategic reasons to be buying the business. While this seems a logical place to negotiate, these buyers are often not aware of the current rates for purchasing a business and thus their offers are deficient.  The other type of buyer is the financial buyer who is interested in buying a good business with a definable upside and can be purchased at a price that is consistent with the cash flow multiples currently paid for such companies. The Montana Group does not charge a retainer so it’s success-based only fee is motivating.