Step 4: The Transaction
Once Steps 1 and 2 have been completed, IAG and MCBI will contact you to determine the best method for supporting the transactional needs of the sale of your business. Further discussion of the asking price, the urgency and other factors affecting the sales methods will be covered in this conference call.
The various options include utilization of IAG's and MCBI's Transaction Specialists to assist with the sales activities. These activities are potentially time intensive and may reflect in the operation of your business.
In general, the process includes the following steps:
- Screen and interview buyers to determine their seriousness and their interest in your company.
- Negotiate a deal including price and terms
- Execute a Letter of Intent (LOI) documenting the price, terms and conditions.
- Assist the buyer in his due diligence efforts. He will be looking at your financials, contracts, customers and any outstanding legal issues or factors that may affect the future performance of the business.
- Generate and execute a Sales Contract that specifies the assets and liabilities that will be included in the sale. Whether you will stay on to help in the transition. Non compete agreements and other details of the transaction.
- At this point the buyer may seek funding for the transaction.
- The Close. This is where the contracts are signed and money changes hands.
The deal may fall apart as progress is made through these steps. This is especially true in the due diligence step if you are not prepared or the books and records are not in order.
This process may take 9-18 months depending upon how attractive your business is to potential buyers. The screening and selection of buyers will take the bulk of this time.
Make Market Program
In conjunction with MCBI, IAG offers an optional Make Market program that may be useful if your business does not attract buyers right away or handling the transaction interferes with running your business.
This program includes an aggressive marketing program and implementation of a detailed marketing strategy to provide the most exposure to interested buyers. Potential strategic buyers will be analyzed and anonymously contacted to determine if they would have an interest in your business.
This program also includes a Chaperon service where the MCBI Transaction Specialist will become more intimate with the project to handle many of the transactional details that may interfere with running your business or that may require a neutral third party to interface and negotiate with buyers.