Almost every business owner comes to "The Decision" regarding selling or recapitalizing your business. For most business owners, especially Micro Market business owners, this could be the most significant decision of your professional life.
But ... for most business owners, selling your business is unfamiliar territory. Many questions come to mind.
- Is this the right time to sell my business?
- How will I find the right buyer?
- How will I prevent my employees, vendors, customers and competitors from knowing my business is for sale?
- Should I be concerned that the WRONG buyer will remove my employees?
- I've never sold a business before. How will I learn about this process?
- How long will it take to sell my business?
Compounding the difficulty of "The Decision" is that industry surveys show that only one in four businesses offered for sale will ever complete a sale. Facts show there are significant hurdles for sellers to find the right buyer, set the right price and structure the right deal.
Among the reasons cited for the 25% closing rate are:
- Business can't support the asking price
- Buyer can't secure financing necessary
- Lack of buyer/seller chemistry
- Legal and/or environmental problems
- Failure of professional advisors to coordinate
- Weak market conditions
For the majority of shareholders of Micro Market businesses, the manner in which "The Decision" to sell or recapitalize your business is handled might significantly impact the remainder of your professional career and your personal life.
We Understand Micro Market Business Transfer!
It's all we do. We concentrate our efforts in the Micro Market where businesses are often overlooked by strategic and financial acquirers and underserved by professionals. We are devoted to and immersed in Micro Market business transfer.
There are several differences between Micro Market business transfers and larger business transfers.
- Most Micro Market businesses include a small number of shareholders (often only one) where most of their personal net worth is invested in their business.
- Bankers and investors evaluate the Micro Market differently than they evaluate large market businesses. Financing is more difficult to obtain. YVG knows which institutions PREFER to do business with Micro Market business owners and buyers.
- EBITDA often needs to be "adjusted" for businesses in the Micro Market.
- Capital Expense projections tend to be more important to business valuations made by financiers and business buyers in the Micro Market.
- There are fewer qualified (both financially and managerially) business buyers who are interested in the Micro Market.
- Many Micro Market businesses are in the service sector and consequently list minimal hard assets on their balance sheets which causes financing concerns. YVG knows how to get "airball" deals completed.
- The US government's SBA financing program is more often used with Micro Market business transfers. YVG has relationships with many SBA preferred lenders.
- Seller financing is more prevalent with Micro Market business transfers. Because YVG has credibility in the Micro Market sector, often we can convince a financier to require less seller financing.
- Professional fees paid to support the selling shareholders can be high relative to the purchase price. Because YVG knows Micro Market business transfers so well, we can control professional fees for both our Client and the selling shareholders. Too often we speak to selling shareholders who have spent four to six months and thousands of dollars in attorney and accountant fees to learn the prospective buyer was not financially qualified!
Yarmouth Venture Group takes an exhaustive approach to structuring customized transactions that address both the financial and non-financial concerns of selling Micro Market business shareholders. We have the resources and experience necessary to provide creative solutions to business owners who are seeking liquidity and may be worried about "The Decision".
The entrepreneurs/clients we support are both financially and managerially capable of buying and running Micro Market businesses. We know how to properly maintain confidentiality. NO ONE knows we are speaking with you. Our client doesn't hear the name of your business until AFTER we have met with you and we BOTH have decided there are viable reasons to continue discussions.
Yarmouth Venture Group invests the time to understand the exit goals of each selling shareholder. We pride ourselves on tailoring transactions that address the unique needs of Micro Market shareholders. Our professionals are dedicated to closing transactions in an expeditious and non-disruptive manner.
Yarmouth Venture Group DOES NOT sell businesses. We focus on acquisitions.
Selling shareholders will NOT pay any fees to Yarmouth Venture Group. If a Yarmouth Venture Group client acquires your business you will NOT pay any fees for any service we provide our client.
Early in the business transfer process, Yarmouth Venture Group seeks to understand both the economic and organizational goals of the selling shareholders to determine if there is a mutually acceptable framework under which to pursue a transaction. This process entails executing a confidentiality agreement, exchanging information about the company and establishing an open line of communication with the shareholders. Our Client is NOT privy to these discussions. The prospective selling shareholders will know details of our Client, however our Client won't know anything about the selling shareholders until there is reason to introduce our Client to a potential relationship. Both YVG and the selling shareholder(s) will determine if there truly is a mutually acceptable framework under which to pursue a transaction.
We invest a significant amount of time to develop a thorough understanding of the company's operations and its market position prior to entering into an exclusivity period. However, we will be fast and frank explaining our interest level.
Once engaged, we fully focus our resources on closing a transaction. Yarmouth Venture Group is dedicated to conducting due diligence in a timely and non-disruptive manner and has existing relationships with financing sources (both debt and equity) and service providers who share our philosophies. These relationships enable Yarmouth Venture Group to close transactions in a timely manner and on terms consistent with expectations.
If you are considering the sale or recapitalization of your business and would like to CONFIDENTIALLY discuss the process with Yarmouth Venture Group, please contact us here.