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Confidentiality: How do you avoid info regarding an M&A deal leaking out to the market?
Answer: There is no question that a breach of confidentiality can cause enormous trouble to the seller and the seller’s business. The Vaughn Law Group takes this subject very seriously by drafting very specific language within our confidentiality agreements and we “manage” the information disclosure process quite closely with the seller to minimize disclosure risks.
Time Table: Is there a realistic time table I can expect to selling my business?
Answer: I would like to say yes, however, based on experience the answer is usually no. Every dealership is different. Factors to consider include condition of the business (both internally and externally), preparation preparing the business for sale, timing, economic factors, and locating qualified buyers etc. It is important to keep in mind that every transaction has its own pace consisting of pre-transaction preparation, actual transaction process and post transaction follow up. I would say that a realistic time frame is between 6-12 months, however, some dealerships may take much longer.
Valuation: How much is my business really worth?
Answer: The valuation stage is significantly more eventful for the seller. The key issue here concerns the seller’s expectations- Are these expectations realistic? For example, I occasionally will hear from the seller who will say my dealer principal friend sold their business at a seemingly staggering price. My response to that statement has been more often than not these stories are distorted and inflated. I believe in utilizing a qualified unbiased outside source to perform the business valuation by applying at least four different valuation methods. Business valuations are not an exact science however I have found that an accurate range can be obtained by using different valuation methods.
Qualified Buyers: How will you locate a qualified buyer?
Answer: Before we even approach locating qualified buyers The Vaughn Law Group will take the time to become totally immersed in understanding the owner’s business, goals and objectives as well as the owner’s human concerns. Depending on the situation, we may suggest to the owner other alternatives to a third party sale such as recapitalization, joint venture, ESOP (employee stock ownership plan) etc. However, should the seller want to sell the business outright, we have an extensive compilation of strategic, corporate and financial buyers.
What Specifically will be the role of the Vaughn Law Group in selling my business?
Answer: The Vaughn Law Group will assist the dealer principal with strategic business and provide legal guidance in preparing the business for sale, developing a disciplined M&A process, locating potential qualified buyers and “quarterbacking” the M&A process to successfully move it along towards the completion date.
