Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

August 5, 2013

Selling Your Business to Fund Retirement

By Joseph Eneldas


Many business owners plan to use their current business as their future retirement account.  What we mean by that is that most of a business owner’s net worth is usually tied up in the business and when it comes time to actually retire, one simply coverts that business value to a retirement income stream by selling the business and investing the proceeds in any number of financial vehicles.  Financial advisors or private wealth managers can help with the investment part, but how does a business seller maximize the value of a business and plan for the sale?

Like most things in life, even when there is a “cookbook” or generally accepted process to follow, it will likely take one longer and have more variables (moving parts) than one expects. Here are some of the critical factors:

Timing – everyone knows the adage, buy low and sell high.  It is as true for a business as it is for real estate, securities and most investments for that matter.  But if it is that easy, why is timing one of the most difficult things to optimize?  Certainly there are many factors.  Among them are the condition of the economy, the competitive landscape, the regulatory environment, and the time to transaction.

We all know that the economy goes through cycles.  It is clearly better to be on the recovery or upside of a growth market cycle, like now.  While the length and magnitude of business cycles are undetermined, the current direction is clear.  If the Fair Market Value (FMV) has been determined and the business marketing package is ready, then the owner should move forward without hesitation.

In terms of competition, the first wave of baby boomers turned 65 last year, and every day a business owner waits, thousands more are doing the same analysis.  One does not want to be looking for buyers when the supply of available businesses may increase over the next few years.  More choices for the buyer will mean a longer process and lower prices for the seller.

America is a country with increasing government regulation at all levels – federal, state and local.  Complying with rules is an increased cost.  Why lower a valuation by absorbing these expenditures?

We know from experience that it can take a year or more to consummate a business transfer.  Business owners need to factor this into their plans.  Start early!

Confidentiality – Many business sellers do not realize the leverage that is lost when there is a breach in confidentiality and it becomes known that the business is for sale, or “on the market”.  Suppliers are less likely to extend credit.  They tighten the terms and watch the relationship with an increased focus.  They do not want to be left short.  Employees are also in a bind.  Their self interest becomes primary and any loyalty may be lost.  Finally, customers become concerned and seek alternative suppliers.  All of these relationships are better to be kept in the dark.  It will payoff at the closing.

Proper Representation – Selling a business by its very nature is an adversarial endeavor.  The seller wants to realize as much as possible and the buyer wants to pay as little as is necessary.  So how does one resolve this problem? The SBA says that most businesses will not be able to be sold due to poor representation.  At a minimum, a qualified business broker can reduce tension and acrimony between the parties.  It is a business transaction and “nothing personal”.  No truer words were ever said.

From the seller’s perspective, a proper business transfer needs to have a:

Valuation (Appraisal), Blind Profile (Business Outline), Confidential Memorandum (Prospectus), Buyer Qualification and Confidentiality agreements, and an Offer to Purchase.  The most cost effective way to ensure that all of these documents are in place is to have a professional in your corner.

While there are other factors that can affect one’s ability to sell a business as part of the retirement planning – such as family members, one’s ability and interest in training a new owner, or leased /owned real estate – we have covered some key factors here.

Recommendation: Start early, limit the number of people to a “Need to Know” basis, and assemble an expert team for the transaction, taxation and legal aspects of transferring the business.


About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional merger & acquisition and business brokerage firm with 30 years of experience in New Jersey, New York, Pennsylvania, Delaware and Maryland that assists business owners and buyers with the business transfer process in a completely confidential manner. The company is affiliated with BBN, with 450 offices and access to a national network of qualified buyers and sellers. For more information, please contact A Neumann & Associates at 732-872-6777.

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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“ I appreciate your diligent approach to screening buyers and sellers as well as the high quality CIM that you produce.”

Andrey O, Investor

“Finally enjoying retirement after recently selling my business using the services of A Neumann & Associates. Joe Oddo provided the conduit to a successful transaction. Joe knew when to inject input and when to simply listen and allow the buyers to vent, step back and regroup. The outcome met our expectations and got us to the finish line, which included my staying with the company six months in order for the buyers to get their footing and keep our workforce in the loop. He helped at every step by providing his expert guidance & resources. Thank you!”

Emily Parker Myers, Co-Owner - Myers McRae

“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
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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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