The sale process starts with a meeting between the buyer, seller and a NLBA representative. This meeting will provide the buyer with an overview of the company, its market niche and industry. NLBA’s primary goal during this meeting is to answer questions and generate interest in the company, however we also have a secondary goal. The goal is to screen potential buyers in terms of financial capability and establish the buyer’s acquisition needs and goals. When a meeting is facilitated between the buyer and seller it has a reasonable possibility of leading to an offer and negotiations.
The second step for an interested buyer is to generally meet with the business owner to discuss operations and tour the facilities. It is our goal during this meeting to facilitate the free exchange of information between the parties, while maintaining control of the discussion. This is to ensure that all key issues are covered and the time is used to its maximum productivity. The first meeting is a pivotal moment where business sales are made or lost. Preparation and proper presentation of information by the seller is critical at this point.
A transaction can go in one of 3 directions after the first buyer/seller meeting. The worst-case scenario is that the buyer will determine that the business is not a fit for them and eliminate them from consideration. This action, although negative in terms of a sale, is positive in terms of the fact that if the presentation of the company has been complete no additional time will be expended by NLBA or the business owner working with the individual or company that is not going to complete a transaction. The second scenario can be a precursor to the first and third scenarios. In the second possible scenario, the buyer remains interested in the company but has not reached a decision regarding whether to enter negotiations. In this scenario NLBA will facilitate additional meetings and the provision of information to use our professional sales skills to tip the scale toward a business acquisition in the buyer’s mind. The final possible scenario involves a buyer who has decided to enter negotiations for the purchase of the business. This decision when generated in the environment of full disclosure established by NLBA for its clients typically sets the stage for a business sale to be completed. A deal is not done at this point, however, in our highly capable hands, the probability of a sale being successfully completed is high.
The negotiation of an agreement between a business buyer and seller occurs on multiple levels. The first level of negotiations generally involves the sale price and financial terms for the transaction. These negotiations are typically a straightforward, short duration activity in transactions facilitated by NLBA due to the fact that our businesses are priced at “fair market” terms when they enter the market rather than at an arbitrary value. NLBA prides itself in its ability to achieve its client’s goals on this level of negotiations. However, we believe our negotiating skills and transitional knowledge also greatly benefit our clients in our ability to negotiate favorable secondary transaction components like post transaction period training/consulting and or employment contracts, non-competition agreements, tax allocation etc.
A successfully negotiated agreement is documented with the signatures of the buyer and seller. This achievement is a major step toward completing the sale of a business. However, NLBA’s representation does not stop with that achievement. We are a complete representation company and will continue to provide administrative and transitional support from the point agreement is reached until the close of transaction. As this is a time where issues ranging from due diligence to document preparation and lease assignment or to the counting of inventory are addressed by the parties.