When you work with a Chinook Business Intermediary, the task of selling a business is far less stressful:
How Chinook Will Assist You:
To engage this process fully, you will need to assemble and provide, over the course of the process, some or all of the following documents or information:
- 3 Years (5 years preferred) accountant prepared financial statements including balance sheets.
- Year-to-date interim financials, either management prepared, or accountant prepared.
- Copies of the lease for premises, and any other leases or contracts for equipment, vehicles, etc.
- A list of furniture, fixtures and equipment (“FFE”) and its estimated current market value.
- Average level of your business inventory and any seasonal fluctuations we should be aware of.
- A copy of your current fiscal year General Ledger (or digital file in Excel format).
The first important step is the valuation of your business. At Chinook, we understand that in making this decision you are making a Life decision first. Life decisions are all about what is next. For most, life decisions have a price tag. Whether you are selling because you wish to retire or to pursue another opportunity or whatever the reason may be, what is next in your life has a cost associated with it.
When Chinook provides a valuation, the goal is to advise business owners what a reasonable expectation from the marketplace may be for your business. Chinook will also help you understand how much of the selling price stays with you. We bring considerable experience, expertise and knowledge of the marketplace when we do valuations. We understand not only business valuation methodology, we also fully understand valuation from the buyer’s perspective. We work with buyers every day. It matters little what one says their business is worth. When all is said and done, more will be said than done and a business is only worth what someone will pay for it.
Once you are satisfied with the valuation and are ready to go ahead, you will formally engage Chinook to work with you in preparing your business for sale by signing our standard form of “Engagement Agreement”. The standard fee for this $2,000-2,500.
Chinook will prepare various marketing materials to package your business for sale. This will include a “blind profile” of your business. This is used to attract buyers without revealing the actual business that is for sale.
There will also be a multi-page document with detailed information about the business, your industry, market trends and conditions and so on. This is called the Confidential Information Memorandum (CIM). The CIM contains everything a potential buyer may find relevant to understand the opportunity and take action where the business is of interest to them.
Everything that Chinook prepares on your behalf is edited and approved by you before it is used in the marketing of your business; Chinook supplies expertise, you supply direction. When these marketing materials are complete and approved by you, we are ready to go to market. Luck is opportunity met with preparedness. We like to be lucky as much as possible.
Chinook will expose your business to buyers that are already known to us as well as buyers throughout the world that we access through the various marketing methodologies that we employ. These include:
- Business Buy Sites (2 million + buyers)
- Internal Buyer Database (3,500+ buyers)
- Partnership Platforms (3,000+ buyers)
- Private Equity Groups
- Personal Internal Networks
Chinook agrees and undertakes to receive and maintain all information, statements, documents or other materials furnished by the Business Owners.
Nothing good comes from people knowing your business is for sale. Employees will fear for their jobs, competitors will start rumours, suppliers will be more cautious, and bankers will develop reticence. Only people who are truly interested and have the means to buy your business need to know it is for sale. Through the Chinook process of prescreening and non-disclosure documents (NDA) we dramatically reduce the chances that word will get out. In every step we keep confidentiality as our first priority.
When a buyer wants to offer on your business Chinook will facilitate the negotiations. As an intermediary, we look to build bridges between what the buyer wants and what the seller wants. The individual intermediary that has brought your business to market will act on your behalf in these negotiations. Another intermediary from Chinook will be assigned to work on the buyer’s behalf. The fact is that a transaction cannot be achieved unless the goals and objectives of both parties are met. We are keen that the seller should receive full value for their years of hard work. That is only possible if the transaction is also caring for the needs of the buyer. A main street buyer requires three things from the purchase of a business, a living wage, cash flow to service debt used to achieve the purchase price and a return on the cash they have invested into the deal, ROIC – return on invested capital.
When you and the buyer have agreed to price and terms on an offer to purchase, the most important work you should expect from us occurs. This is Due Diligence.
While the business is on the market, it is important that the Seller find, prepare and maintain certain records and information that will be required during the Due Diligence phase of a sale. Due Diligence refers to the inspection and verification of information, documents and records that a potential Buyer will undertake who has made an offer to purchase that has been accepted. Chinook will explain this and work with you to identify and collect the documents and information that will be part of this process. It is important to be prepared. 50% of potential sales fall apart in due diligence. Not so on our watch. Not so because of the assistance you provide us to ensure we, you and Chinook again, are prepared when the precious and exciting moment of an accepted offer comes. Luck is opportunity met with preparedness. Wait, we already said that.
Chinook is committed to doing our best and most professional job helping owners achieve their objectives. A timely and best-value sale of a business requires Chinook to invest a lot of time and resources into the task. By entering into an Engagement Agreement with Chinook, a business owner also makes a significant legal, financial and personal commitment. At Chinook we acknowledge, understand and appreciate this commitment. We are grateful for the opportunity to work with business owners in this process.