Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

February 4, 2021

Motivated Business Sellers

By Jeremy Albelda

business-buyers

In this time of the Covid-19 pandemic, selling a business has taken a new turn.  Many business owners are motivated to sell their business and retire.  They have already experienced the 2008 recession and don’t want to go through the same pain again due to the recession of 2020 and the virus.

But what defines a motivated seller? Typically, the connotation with “motivated” implies selling a business below market value with inferior terms due to the business being semi-distressed or the technology systems outdated, or simply little access to lines of credit to expand the business.

However, the reality is that “motivated” in our trade refers to a seller who is truly willing to go through with a sale. “All too often we have business owners who think they would like to sell,” says Achim Neumann, President, A Neumann & Associates, a Merger & Acquisitions and business brokerage firm, headquartered in New Jersey, “whereas in reality, these folks have little perception of the reality what buyers are looking for and what typical transaction terms are in the market place. The outcome is that the business sale process is started with lots of energy, but then fizzles out towards a deal closing and ultimately is never completed.”

Furthermore, some business owners are highly concerned with the typical aspects and terms of selling their business, specifically, their concerns in finding a buyer that would like to expand by acquisition.  Whereas sellers generally like fast closings, they are concerned with the confidentiality being maintained throughout the sale, having to partially finance a sale, or the simple legacy desire to find a buyer to continue to run the business the way they have for years and to protect their employees.

How does the owner ensure that these concerns are addressed?

Firstly, the most important thing to do is to hire a professional M&A advisory firm to handle a transaction. The depth of transaction knowledge such a firm brings to a sale far exceeds the savings of a DIY attempt, as the previously raised concerns are very much known to the firm and can be addressed.

Generally, the first step in the process is to have an independent 3rd party company perform an objective valuation of the business.  This gives the owner the power to control the process to ensure a fair value for the business.

Next is to have a professional marketing package prepared and to advertise the business with a blind profile (in a non-divulging way) to attract interest in the sale of the business.

Such marketing should include internet based advertisements as well as the use of proprietary client database information. For example, this firm has a proprietary database in place with close to 600,000 investor contacts, adding to such every month 150 to 250 buyer inquiries.

Only after a buyer is pre-qualified in a detailed four-step process and has signed an NDA, then any confidential information is disclosed. Confidentiality throughout the whole process is key to any transaction.

Once the documents have been reviewed and a site visits is arranged, an Offer-To-Purchase is then prepared and signed by both parties.  This document has all the parameters of the deal including amounts, terms, dates when each part of due diligence is to be completed and bank financing is to be finalized and what assets are included with the purchase.

Due diligence then commences and is coordinated by the advisor to ensure the buyer and the bank obtain all the data they need in order to close the transaction bringing both parties to a successful transfer of assets.

Advice to Motivated Business Owners?

It is important to ensure an experienced M&A Advisory firm like A. Neumann & Associates, LLC is utilized in order not to leave money on the table and that the transaction will indeed get to the closing table.  This will free-up time and allows the business owner to continue to run his/her business without a reduction in revenue/profits due to the sale of the business.

Now is a good time to consider the sale of your business.  Within the government’s Covid19 stimulus package, the SBA has changed its guidelines for 2021:

  • The SBA is waiving all lender and borrower fees for both the 7(a) and 504 loan programs through September 30, 2021.
  • For loans approved by the SBA between February 1 and September 30, 2021, the SBA will provide 6 months of P&I payments, capped at $9,000 per month per borrower.

Following the above will further stimulate the number of investors coming into the market to find a well-prepared business for sale – creating an excellent macro-economic environment for the business owner to sell his/her business.

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 info@neumannassociates.com

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Client Testimonials

“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

“A Neumann & Associates is the only business broker I would use or consult with. They have assisted with 3 business sales over the past 15 years with me. They are honest and sincere and have always performed better than my expectations. They are the only one i would use for the sales of my businesses.”

James Belanger, Business Owner

“I wanted to take a second to commend the exemplary customer service from both you [Karin Neumann] and Mr. Valentino. It’s both a rarity in the industry, and very much appreciated.”

Andrew G., Investor

“We worked with Neumann & Associates to investigate the purchase of a research company in 2010 and found Achim to be capable, forthright and realistic. His depth of experience enabled us to fully understand our options, offering creative options that might enable the acquisition. While we didn’t acquire that particular company at that time, we know exactly who to call whenever we’re looking to buy or sell a business.”

Daniel Coates, Buyer

“Purchasing a business through this firm was a pleasure. Gary was very professional and transparent throughout the entire process. I look forward to working with A Neumann & Associates in the future.”

William Klemens, Buyer
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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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