Calculate the Value of Your Business

Calculating The Cost

For an owner, selling a business is a significant decision. Most owners sell their business because of lifestyle reasons - retirement, family, health, a new chapter. However:

70 %

Of Business Owners Do Not Know The Value of Their Business

85 %

Of Business Owners Do Not Manage Their Business To Value

79 %

Of Business Owners’ Net Worth Is In Their Business

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THE PROCESS

We've Been In Your Shoes

We respect what you have accomplished because we've been there too. We team up with you through the entire process and at your pace. Be comfortable and ready to exit the business on your terms. 

PREPARATION

This often begins a couple of years prior to a sale. We will analyze historical performance of the company and ensure that it supports the company’s revenue and profit projections; assist in the identification of all potential EBITDA adjustments; review and assist with refinement of critical company sales and operational information. Where there are areas that need your focus to maximize sale value in the months and years ahead, we will make specific recommendations.

STEP 1

VALUATION POSITIONING

Brentwood Growth will assess and advise the company about how financial performance and valuation are likely viewed by the market. We will work with management to demonstrate how the company’s core strengths represent value-add or value creation to potential acquirers. We will consider all three buyer groups (financial, strategic, and owner/operator) while considering SBA funding parameters to determine different ways a sale could be financed. We will give you a specific value range and the assumptions behind that range.

STEP 2

MARKETING & QUALIFYING BUYERS

We will prepare all the marketing materials, work with you to identify which of the three buyer groups (financial, strategic, and owner/operator) are appropriate, and then execute the listing strategy. Utilizing proprietary databases built through the years, offshore resources to build strategic list, and subscribed portals, we will obtain maximum exposure. We will vet and qualify potential buyers, then negotiate an appropriate term sheet. We will keep the distraction away from you and only introduce you to vetted buyers.

STEP 3

MANAGING DILIGENCE

We will preserve value for your company by bringing our experience of successfully managing the buyer’s due diligence on the company. We will manage this phase based on good preparation and transactional experience, while preserving value by managing any potential purchase price adjustments.

STEP 4

Negotiating The Transaction Documents

We will work with company management and legal counsel to identify critical areas in the documents to make sure the 'deal' is not eroded by Reps and Warranties. We will ensure that the Reps and Warranties are reasonable and represent the 'market'.

STEP 5

Get The Transaction Closed

We will work with management, lawyers, and the buyer to achieve timely completion of transaction documents, thereby guiding management in the completion of transaction disclosure schedules. We will stay on top of the buyer during the process to drive timely execution

STEP 6
Frequently Asked Questions

OUR METHODOLOGY HAS A PROVEN TRACK RECORD

Who Are We Targeting?

Brentwood Growth will look at each of the following three groups with you to get the maximum exposure, visibility and value.

Each group has characteristics and objectives that are unique with pros/cons.

  • Identify which groups make sense to market your business to.
  • Utilize our proprietary databases we've built through the years.
  • Build your company's strategic lists.
  • Subscribe to portals to obtain maximum exposure and interest.

3 TYPES OF BUYERS

FINANCIAL BUYERS

  • Private Equity, Family Offices or Passive Individual Investor
  • Investment as platform company or “tuck in” to exiting platform
  • Investment only – not involved day to day, looking for solid, consistent, growing cash flow performance
  • Returns based on consistent cash flow performance and valuation growth; more likely to “buy low-sell high”.
  • Growth – demonstrated and sustainable
  • Financial Buyer considerations include

Reliance on founder
Management team in place
Size – typically based on EBITDA
Revenue “Churn”
Reliance on founder
Partner or Vendor relationships
Customer concentrations (>10% to 20%)

Owner / Operators

  • Individual that will be actively involved in day-to-day management of business
  • Needs to be strong on sales / business side or technical / operational side of business
  • Looking for solid, consistent cash flow performance with growth potential
  • Returns based on cash flow to fund owner/operator compensation as well as investment in company to drive growth and valuation enhancement
  • Cash Flow multiples
2X to 4X less than $1M
3X to 5X for $1m to $2.5M
5X+ greater than $2.5M

Strategic Buyers

  • Companies actively seeking other companies to acquire – Consolidators, aggregators, competitors, companies similar to you in different geographic markets, neighboring industries or a major client
  • Willing to pay more for the business based on strategic, financial, or operational factors
  • Returns based longer term return on investment and “accretive” shareholder value

Size typically based on EBITDA
Revenue ‘churn’
Reliance on founder and management in place

  • Strategic buyer considerations include:

Increase existing market share from existing or complementary products or services
New markets, customers or geographical footprint
New technologies, capabilities or IP
Cost synergies
Part of a roll-up strategy
Could operate as stand-alone or consolidate into existing operations

FAQs

Answered by Expert Business Brokers

If you have additional questions please just contact us. We would like the honor to speak with you today!

Generally, it takes about six months from the time a business is listed to the closing of the transaction.

Your business should be listed for a realistic price that is close to what it will sell for, but at the same time, leave some room for negotiating. When determining the price, Brentwood Growth uses a combination of an EBITDA appropriate industry multiple.

The sales process consists of listing the business, locating a buyer, negotiating the terms of the sale, executing a letter of intent, undertaking due diligence, and closing. Some of these tasks are the responsibility of the attorneys and CPAs that represent the sellers and buyers.

You have no obligation to tell the truth concerning the actual financial and market status of the business. After a buyer is found, you will most likely have to maintain and operate business as you normally would between the time a contract is signed and the closing. We recommend that you have an attorney advise you or specific responsibilities and obligations.

Usually, the prior owner is required to stay on as an employee for a reasonable period to train the new owner and to introduce him or her to the customers, employees, and suppliers. Prior owners are compensated as an employee. Depending upon the circumstances and your level of interest in staying on, your time commitment could range from as little as a few weeks to several years.

Brentwood Growth
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