Ready to buy or sell a businesss
Three points I want to expand on First National Bank’s blog post You’re Ready to Acquire a Business, Now What? are (1) surrounding yourself with adequate and knowledgeable support, (2) documentation organization, and (3) knowing your company’s value.
Having bankers, accountants, attorneys, and valuation and due diligence professionals that know your business and how the lending process works will make your inorganic growth or sale smoother. Frankly, it’ll help you get a better deal too.
Organization - don’t discount the importance of having your ducks in a row. Well-documented and organized businesses get loans quicker and give your M&A team the impression you’re ready for the next step and have thought out this transaction in depth. Buyers want to see “well-oiled machines” and don't want to do all the work to get basic things, like organization, up to an adequate standard.
Get a valuation beforehand. Business appraisals do not cost an arm and a leg and give you negotiating power. You came prepared to negotiate and know what the value of the company is. You also know how far you can stretch from your target purchase price and still get a fair deal that is bankable. Often, buyers and sellers agree on unbankable acquisition amounts. Ask your SBA lender who they use for valuations or if they will do a pre-screening valuation of your business to give you an idea of what it is worth.
