A Neumann & Associates, LLC, a New Jersey-based Mergers & Acquisitions and Business Brokerage firm, discusses the top 3 concerns in a business sale transaction

ATLANTIC HIGHLANDS, NJ, US, March 22, 2022 /EINPresswire.com/ -- What are the biggest questions that need to be addressed for business owners looking to sell their business? From many years of experience, it all comes down to “Three Big C’s” – Cash, Confidentiality and Continuity.

1. CASH - What is my business truly worth and how much cash will we receive at closing? – This is priority #1 for most business owners. In order to be comfortable with a sale, it is imperative that a clear deal structure be defined and supported before going into the market. As a first step, a proper accredited fair-market valuation should be performed and delivered to the business owner. The valuation should accurately identify sellers discretionary cash flow (or the true benefit of ownership on an annual basis) as well as the assets included in a sale. Based upon current market factors, the financial performance of the firm, and specific growth potential, an accurate value can be determined.

2. CONFIDENTIALITY - What is the process to discretely sell my business and meet my goals? – Unlike selling real estate where everything is out in the open and publicly marketed, the sale of a business should be completed in complete secrecy as best as possible. The last thing that business owners want is for key management, employees, competitors, or suppliers to find out that the company is for sale. There is no need for them to know the intentions and suffer unnecessary anxiety about a possible change at the top. If done properly, an efficient sale can be executed without any breaches of confidentiality.

3. CONTINUITY - Will employees and customers be adversely affected by selling? – Beyond the financial aspects of a transaction, business owners are rightfully worried about the ultimate fate of key management, employees, and their valuable clients. Powerful relationships inside and outside of the organization have been built over many years and the last thing an owner wants to do is jeopardize those for any reason. The key questions that buyers will have to address surround their plans and intentions for the current staff post-closing. The security of key people and the continuity of operations is a tangible fear of any transaction.

The good news is that most transactions that occur with privately owned companies involve no significant change to the current organization and its key people. The reasoning is simple – the buyer is spending good money to buy goodwill built up over many years with an organization in place that is performing well and that is going to be required to grow the business into the future. A proper transition with the current owner and preserving top talent is essential for any new ownership to meet their complete goals – this will certainly be the focus for at least the first 12 months. The result is that there is very little change to employees, management, and customers coming out of a sale.

Achim Neumann
A Neumann & Associates, LLC
+1 732.732.6777
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