At Chinook, we understand that in making the decision to sell you are making a life decision. Life decisions are all about what is next. For most, life decisions have a price tag. Maybe you are selling because you wish to retire or pursue another opportunity. Whatever the reason may be, moving to the next stage in your life will have a cost associated with it.
When Chinook provides a valuation, the goal is to advise you, the business owner, 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, a business is only worth what someone is willing to pay for it.
Go or no Go? If your current business value does not meet your life requirements for the next step you hope to take, Chinook can help coach you to improve the value of your business. (link to Coaching / Exit Strategy. If it does, continue reading.
So, the hard part is done, you’ve decided the time is right, now let our team of professionals guide you through the rest of the process. An engagement with Chinook will entail us entering a legal agreement with you. Chinook will collect a reimbursable retainer that will be returned against the success fee upon the completion of a purchase and sale transaction that is acceptable to you.
We at Chinook so passionately believe that it takes expertise from numerous professionals to sell a business on the best price and terms that we wrote a book on the subject (link to book). At a minimum, you will want to engage an experienced business transactional lawyer and begin conversations with your accountant. We are happy to provide a list of experienced professionals if you do not already have professional relationships in place.
Chinook will prepare a summary, detailed profiles, and other marketing materials to package your business for sale. This will include a blind profile of your business. A blind profile is used to attract buyers without revealing the identity of 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 Business Profile (CBP) or confidential information memorandum (CIM). The CBP or CIM contains everything a potential buyer may find relevant to understand the opportunity and act where the business is of interest to them. The CBP or CIM will take on a format that is most appropriate for your business. Everything that Chinook prepares on your behalf is edited and approved by you before it is used in the marketing of your business. Chinook provides the expertise. You provide the direction.
Our experienced team will provide you with a strategic roadmap, detailing our recommended sales and marketing strategy. This report will include our recommended pricing strategy a list of promotional activities we believe will best position your business in front of the right buyers. You will have the opportunity to give your input and sign-off on the finalized materials before we activate your campaign.
Nothing good comes from people knowing your business is for sale. Employees will fear for their jobs, competitors will start vile rumors, suppliers will become more cautious and bankers will develop reticence. Only people who are genuinely interested and have the means to buy your business need to know it is for sale. Through the Chinook process of pre-screening and non-disclosure documents (NDA), we dramatically reduce the chances that word will get out. Through every step, confidentiality is our first priority.
Chinook maintains a premium buyer database with more than 1000 prospective purchasers segmented by industry type and financial capability. We will pore through our internal database before targeting outside buyers, but you can rest assured that a buyer who does not have the financial capacity to purchase your business will never be allowed to waste your time.
When a buyer wants to make an offer on your business, Chinook will facilitate the negotiations. As intermediaries, we work 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 may 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 meeting the needs of the buyer.
Prepare to be probed. Most buyers use the “trust but verify” approach to business purchases. They will want to confirm all the information provided is true, accurate, and up to date. If there are claims made that can not be verified, a prospective purchaser will not likely continue the process. Our team has been through this numerous times and know what to expect, to that end, we will have prepped you on the most likely document requests and you will have most, if not all, the due diligence documents already prepared.
Once due diligence is complete, you will need to sign a Purchase and Sale Agreement (sometimes called the Definitive Agreement) with the buyer. This document is a more comprehensive version of the LOI you executed to start the process. It is typically dragged by the Purchaser’s lawyer at their cost and then reviewed and modified by your team. It is legally binding and includes the Bill of Sale and will detail any outstanding obligations you have towards the Purchaser. Normally funds are released to the Vendor on the Completion Date ager the Purchase and Sale agreement has been executed by all parties.
In almost every case, the buyer will require some post-sale training and support. Depending on the nature of the business, the complexity of business operations and the value of the business, this support period can be anywhere from 1 week to 3 months,