CHECKLIST FOR SELLING A BUSINESS

EXCLUSIVELY FOR OWNERS IN THE RECYCLING, WASTE, PALLET, AND RELATED INDUSTRIES

The decision to sell your business is one of the most important decisions you will ever make. Starting the process using the following checklist can help you start to think through the many aspects involved in selling a privately held company. With over 30 years of experience in the recycling, waste, pallet, and related industries, we have prepared this brief starter checklist of 10 items to consider when selling your business.

CHECKLIST FOR SELLING YOUR COMPANY

1. MAKE THE RIGHT DECISION

Before entering the process of selling your company, the first thing on a business sale checklist is to decide whether or not you and your company are ready to sell. Often times the owner is ready, but their business is not. Once you have decided to sell, engaging a business advisor to review critical areas of the business can bring additional enterprise value to the business sale process. These process reviews include operations, accounting, sales, contracts, and liability reviews as well as reviewing employee agreements.

Selling a business can be stressful. There are various reasons why owners decide to sell, such as wanting to retire without worry, spending more time with family, or on your favorite hobby! There can be industry or economic changes that are causing headwinds and owners feel it’s the right time to sell. The reasons to sell are unique to each business owner but the process to maximize the enterprise value of your business is much more complex. Some things to consider are:

• How do I ensure the process is kept confidential?
• Do you have an idea of the value of your business?
• What are all the steps in the selling process?
• Will the selling process hinder my ability to run the day-to-day operations?
• Do I discuss the potential sale with my management team?
• Do you have a buyer in mind, such as your children or employees and how does that value compare to the market?
• What do you want to do after you sell your business?

After you carefully consider all the relevant factors and you feel that it is time to explore the possibility of selling your company, you can move on to other items in the business sale checklist.

2. TALK TO A BUSINESS ADVISOR 

Selecting a qualified 3rd party sell-side advisor to manage the entire sales process will be the best first step in your goal of selling your company for the maximum value as well as significantly reducing your stress. Choosing an advisor with solid industry experience that can talk the language of your industry to all types of buyers is invaluable. Does the business advisor have access to industry buyers as well as public companies, individual investors, and the private equity market? Schedule a no-cost initial consultation with a business advisor so you can see if the advisor is a fit representing you and your company in the sale process.

3. IDENTIFY STRENGTHS & WEAKNESSES OF YOUR BUSINESS

As part of the sale process, you will need to provide information on what makes your business unique, and valuable and this will include;

• How do you compare to your competitors?
• What types of customers do you have?
• Skills and responsibilities of your employees.
• The opportunities and challenges that you have.
• Does any customer make up a large percentage of your revenue?
• Contracts and written commitments of your business.
• Healthcare and employee benefits review. 

4. GOING TO MARKET

A good business advisor can provide a detailed timeline of the sales process. This includes gathering financial information based on tax returns, company profit and loss statements, and balance sheet reviews. Other go-to-market items will include the following.

• Review financial audit process and tax returns.
• Develop go-to-market teaser.
• Develop a detailed marketing presentation on the company’s strengths and overall value.

5. PROTECT THE CONFIDENTIALITY OF A BUSINESS SALE

Keeping the sale process 100% confidential is a must for all business owners. Discuss how your business advisor will protect confidentiality within the sales process. How will they go to market and how will they help you keep this process confidential from your competitors, customers, and employees?

6. SPEAKING TO POTENTIAL BUYERS

You want to speak with the best candidates to buy your business. You should establish a collaborative effort with your business sell-side advisor to provide them with some guidance on what is important to you in a potential buyer. An advisor who has gone through the sale process within your industry can assist you in introducing the best potential buyers based on your preferred outcome. Owners want the legacy of the business to continue to thrive and protect the many relationships that have been developed over the years. Your sell-side advisor can create discussion sessions within the sales process so you can ask direct questions to all potential buyers about their vision for the future of the business. You want to learn how they will take care of your legacy relationships with customers, vendors, and employees. 

7. ACCOUNTANT FOR DUE DILIGENCE

After you accept an offer from a buyer, you will need to provide more detailed information on your business so that the buyer can confirm the validity of the information provided on the business before they close the transaction. Most business sellers have an accountant and business advisor who assists them in this process. If you don’t have one, a business advisor can recommend one for you. Your accountant will typically communicate with the buyer’s accountant to ensure a smooth flow of information and get their questions answered efficiently. You will want to have your sell-side advisor assisting you to reduce your stress and to keep the process moving forward. 

8. SELL-SIDE LEGAL REPRESENTATION

Almost everyone knows a lawyer. However, you want to ensure that you have a lawyer with experience handling business sales. There are many different aspects to law, and just because a lawyer is strong in one area doesn’t necessarily mean that he has experience in handling the sale of a business. Choosing a lawyer that is a friend or family member that does not have business sales experience can be detrimental to the sales process.

Larger sell-side advisors can recommend an experienced attorney who can assist in the many documents associated with a business sale. A good sell-side advisor can help to keep the process moving forward to ensure the certainty of the closing transaction. 

9. CLOSING THE TRANSACTION

Attorneys are paid to be careful. It’s important to remember why you wanted to sell the business. As we counsel both buyers and sellers, there is nothing in life that is totally risk-free. At the end of the day, you need to decide what is most important to you. You don’t want to let small details get in the way of what is overall the right decision to achieve your goals. An experienced sell-side advisor from the industry will prove to be your best asset and most trusted advisor when you get to this stage of the sale process. 

10. PREPARE YOU AND THE BUYER FOR SUCCESS

During the due-diligence process, you will share information on what the buyer will need to do to be successful in the business. This will occur before the sale and after the sale as you will want to provide the buyer with the nuances that make up the many relationships that your company has fostered over the years. This transitional (after the sale) consulting by you and your management team will include information on company sales and services as well as employees, customers, suppliers, and any other factors that are important in continuing the ongoing success of the business.