Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

May 21, 2020

How to Maximize Sale Price When Selling Your Business

By Achim Neumann

business broker

The priority for any business owner when selling a business is obtaining the highest sale price and best deal terms. The factors that contribute to overall sale price are manifold, and being aware of all of them is essential. What follows are some insights into how to sell your business for the highest price and best terms garnered by our experienced Business Brokers over the years.


Financial Review

To determine your initial asking price, you will first need to carry out a review of a minimum of three years of tax returns and generate an up-to-date profit and loss statement for the current year with comparison to the same period from the previous year.

In addition to tax returns, buyers will want to learn the true cash flow the owner derives from the business. To do this, a seller’s discretionary cash flow (SDCF) will need to be calculated for the past three years, the current year and projected out for three years. This figure will include the owner’s salary as well as the perks and benefits that the owner receives from the business (e.g. company car, health insurance, and retirement plan). It also includes discretionary expenses which are not required for the day-to-day running of the business (e.g. travel, entertainment, country club memberships and other perks).

A larger SDFC will allow a seller to ask for a higher sale price, so calculating this figure accurately is important going into sale negotiations.

The Right Business Broker And M&A Advisor

Hiring a business brokerage or Merger & Acquisitions firm that has experience in selling businesses in your industry is essential. Their expertise will allow them to market your business correctly. This will ultimately result in a larger pool of potential buyers which will hopefully help to create a bidding war to drive up the price.

Make sure to hire a firm whose fee structure is based on a percentage of commission payable when the sale goes through. This will give them added incentive to go the extra mile and hold out for the highest possible price.

Asking Price

A well-positioned initial asking price is an integral part of maximizing the sale of any company. If the price is too low, you run the risk of having to settle for less at a later stage in the negotiations, in essence “leaving money on the table”. If you price it too high, you may attract fewer potential buyers and run the risk of being low-balled, potentially compromising confidentiality in the process with an unreasonable number of buyer introductions. A Business Broker will be able to help you settle on a price that falls somewhere between these two extremes.

Confidential Marketing

The importance of keeping the sale of your business confidential cannot be overstated. If customers, vendors, banks, landlords and employees find out that change is afoot before the deal is done, they may get cold feet or become distracted.

An experienced Business Broker will have the proper buyer pre-qualification process in place, and the right contacts and know just how to advertise the business, selecting the right targets to market to so that potential buyers are found without news of the sale becomes common knowledge.

Do Not Close Off Your Options

Try to keep an open mind when it comes to buyers. Know that the best offers sometimes come from buyers who are not familiar with your market segment. As long as potential buyers are financially qualified and have the necessary skills to run your business, they can always learn the business aided by your supervision in the post-sale period.

Transparency & Communication

You should complete due diligence as quickly and efficiently as possible. Transparency is important to convince buyers of the profit-making potential of your business. Providing all the documentation at the first time of asking will give prospective buyers the confidence that everything is as it seems. Be available to respond to any questions about the business that a buyer may have. Only if a buyer is sure that everything is above board will they offer a price which is close to your initial asking price.

Negotiation Phase

It is important to remember that the proposal with the highest price is not always the best offer; the structure of the offer (deal terms) and the buyer competence are also important. Decide on your priorities for the negotiation stage as you examine the offers. Once you have relayed these priorities to your Business Broker, he/she can negotiate on your behalf to get the best price and terms.

Providing a Transition After The Sale

Typically, a deal asking price includes your advice and guidance after the sale goes through. Transition periods vary greatly and depend on the needs of the buyer. In some cases, your involvement will be minimal. In others, you will be required to introduce the new owner to customers, suppliers and staff.

About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or

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Client Testimonials

“I had been in touch with Karin and Gary from A Neumann & Associates regarding some opportunities and was looking forward to meeting with them. Hence, when they organized a seminar in Princeton, NJ, I was quick to sign up. The seminar was very informative as the team walked the attendees through various scenarios and referenced real life buying/selling situations they had been through. The sessions by Gary, Karin and Achim were crisp and focused and brought clarity to potential seller and buyers. I strongly recommend the team and look forward to continue working with them.”

Gaurav Tyagi

“Thank you for your Event on "How to value, Sell, and Buy A Business for Maximum Profit" and the insight into ANA’s approach on what is involved in the Business Exit for sellers. Garys Hervieiou's "Business Valuation", Achim's "Deal structure" presentation and Karin’s "Preparing the Package" are real street knowledge shared. They answered attendees questions which makes it more interesting for learning from others. Great for small businesses like us. The presentations were totally worth our time and travel for the event to Princeton, NJ from Rockville MD. Ravi Bhutani, President, CIPS”

Ravi Bhutani

“Gary, this is to thank you for an excellent job done in selling our business. We could never have done it without your professional expertise, dedication and time put in without reservation to make it happen. We will gladly and highly recommend you to anybody in our position.  It was a pleasure to work with you.”

Pat Iammatteo, Owner

“Your vetting is simply outstanding, among the best I've seen from a broker.”

Eric H., Investor

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Marc, who explained the process in detail. After meeting with Marc in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using to sell my business for max value. Working with Marc at A Neumann & Associates was very easy and professional. I did not know all that was going to be involved in selling my business but they helped me through the process. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. I highly recommend this firm to anybody who wants to sell now or down the road. Marc not only knows his stuff, but actually is a real nice guy.”

Double Diamond

“Used A Neumann & Associates to sale my business. could not imagine having done it with out the patience and experience Gary provided. Thanks Gary,”

Dennis Frazier

“Working with Marc and his company was a pleasure. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. Marc handled most of the interaction and he has one of the greatest demeanors. Again, it was a pleasure working with him and his firm.”

Douglas DiCeglio

“I recently completed an acquisition using A Neumann & Associates. Tony Valentino was very helpful and accessible during the entire process. They do a thorough job vetting both parties and got us to the finish line.”

Srini Mudambi

“Claus out of Florida helped us with the sale of our business. We had never done anything like this and him and his team walked us through the process from start to finish. We had some challenges through the process and Claus continued to show up even in the difficult conversations.”

Colby Harris, Co-Owner, Del Mar Designs

“Claus Madsen thoroughly helped us with selling our company. From the 1st introductory meeting explaining to us what was possible, to providing us with resources to assist with the sale. Claus was invaluable throughout the whole sales process. Claus was with us every step of the journey and always made himself available for any questions or issues that came up along the way. If you are interested in selling your business, I encourage you to reach out to Claus and the ANA team so that they can let you know what’s achievable. These guys will make it happen!”

Ron Harris, Co-Owner and Vice President, Del Mar Designs
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Contact A Neumann & Associates, LLC

If you are considering selling your business, please contact us to learn more about our comprehensive service spectrum. Our experienced professionals will answer all your questions about selling a privately held business in complete confidentiality. Please fill out our contact form, or call us at 732-872-6777. We will contact you directly and will never identify ourselves to your employees.

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