Business Brokers in Virginia
Selling a business may be one of the most significant decisions an entrepreneur can make. A Neumann & Associates, LLC has decades of combined experience that will ensure that the selling of your business will be a profitable and smooth transaction.
If you’re selling a business in the commonwealth of Virginia, A Neumann & Associates, LLC offers the mergers & acquisition advisory, business brokerage, and professional financial services that you require. We take pride in the business advice and financial acumen that we provide to our clients. Marketing a viable business can be a complex process, fraught with potential pitfalls. That’s why it’s essential to partner with an experienced Virginia business broker who knows the local market and can help you realize the maximum value on your transaction.
Establishing a Price for a Business
In order to determine an appropriate sale price for your business concern, we will require your company’s financial records. We will then recast the financials to get a picture of your corporate cash flow and other key metrics. This process will enable us to submit your company for valuation. Accredited valuations examine your income, balance sheet, revenue generation of your operations, expenses, the market in which you operate, et cetera. Having this complete picture is a key part of the process that will enable A Neumann & Associates, LLC to gauge your business’s demand.
Knowing what your Virginia-based business should fetch on the market places you in an advantageous position from the start.
The Business Valuation Process
There are several different methodologies for valuing a company:
- Single-Period Capitalization Method
- Discounted Cash Flow Analysis (also referred to as the Intrinsic Value Approach)
- Comparable Company Analysis (also referred to as Market Approach)
Each has its advantages and drawbacks, and it is worth examining them.
Single-Period Capitalization Valuation Method
This method requires the valuator to calculate a single period’s cash flow and divide it by a capitalization rate. In some instances, this capitalization rate may be one plus the long-term growth rate of the business.
Discounted Cash Flow (DCF) Method
This method uses projected cash flows to determine the valuation of the business. The concept uses the future value of money to determine the value of the company.
Comparable Company Analysis
A valuator uses Comparable Company Analysis in a more complicated but similar way that a real estate appraiser uses comparables to value a property. By examining transactions that have occurred over the past five years with businesses of similar sizes, types, and locations, they are able to create a list of comparable transactions. They can then adjust the prices based on the differences in the comparable businesses and the company that is being valued.
With a list of comparable business transactions, it’s essential to select the appropriate variables to calculate the multiple required in the asset valuation estimation. That means that the valuation firm will need to identify comparable metrics — EBITDA, revenue, cash flow, etc. — in order to complete this type of valuation and obtain truly comparative values. The next step in the process is to convert market values to standardized values, which yields prince multiples. The end result is a controlling difference from firm to firm.
CoViD-19 and its Impact on Business Valuations
Like many other facets of business and the economy, CoViD-19 has left its mark on business valuation. Recognizing the impact of the global phenomenon, the American Institute of CPAs has issued guidelines for business valuation firms. These new recommendations take into account variables like tighter cash flow, reduced revenues, and other 2020-2021 anomalies.
Selling Your Business on the Market
Marketing a business is a substantial enterprise with many individuals involved. This, of course, will raise concerns about confidentiality as lawyers, accountants, and executives become aware of the pending transaction. The premature release of information about the sale of a business can negatively impact the market value of your company in a number of ways. When you work with a team of professional business brokers, however, you can be confident that the sale will proceed smoothly and quietly. By identifying the key players and coordinating their efforts, you can ensure that you will be putting a pristine product on the market.
As business and financial advisors, A Neumann & Associates, LLC will properly value your business and identify qualified investors and purchasers who have the financial wherewithal to follow through with their bids. We will take you through the entire process, from our first meeting to your closing and beyond.
COVID-19’s Impact On A Business Brokerage
Before the pandemic, many businesses were booming and did not expect the sudden turmoil that would come with the global economy shutting down. In the United States, small businesses and major corporations face international economic challenges in the shadows of a worldwide health crisis while being reliant on SBA loans. It’s important that a company’s key leaders communicate a unified message to stakeholders to alleviate uncertainty during the selling of your business.
Selecting Qualified Purchasers and Investors
At A Neumann & Associates, LLC, we separate ourselves from the brokerages that simply collect buyers in the hope that they will have an opportunity to make an easy commission when a seller appears. Many brokerages only negotiate with a point-of-contact person that has no real bargaining power in the organization that they represent. This results in inflated and false bids, which can hurt your position with other investors. We are a seller-oriented firm. Our business transaction professionals learn the purchase preferences of potential buyers and prescreen them to ensure that they are capable of following through on the transaction. We will not put you in front of an agent of the buyer who lacks the authority to make a decision.
When we have assembled a list of serious buyers, A Neumann & Associates, LLC will review the pros and cons of each offer. This will ensure that the sale of your company will go through smoothly, expeditiously, and for the maximum amount.
We appreciate the contribution that small businesses make to our economy and the labor market. At A Neumann & Associates, LLC, however, we direct our energies toward marketing midsize corporations. This permits our business brokers to concentrate on fewer, large clients as opposed to many small ones. The investors we do business with are authorized to negotiate for themselves or their organizations. Our brokers have over 100 years of combined experience. They are entrepreneurs themselves and have established reputations as seasoned professionals. A Neumann & Associates, LLC usually sells business with a minimum of a half-million dollars in annual revenue. Call today to schedule a consultation.
Confidentiality in Business Transactions
Confidentiality is essential when it comes to marketing a business. A seemingly innocuous piece of information leaked about the business during this critical time could adversely impact the marketability of the concern or spoil a pending deal. We require prospective purchasers to sign a non-disclosure agreement, preventing Virginia buyers and their agents from disclosing information to unauthorized parties who aren’t explicitly listed in the covenant.
A legally binding “gag order” of this sort ensures that all parties know what’s required of them with respect to confidentiality and makes violations actionable. Typically, the list of authorized personnel included in the covenant include financial advisors, lawyers, accountants, business brokers, and agents. A confidential memorandum will then be executed, which can include trade secrets, financial records, etc. The purpose of this exchange of information is to assist the buyers and sellers in making decisions related to the transaction.
FAQ About Selling a Virginia Business
At A Neumann & Associates, we interact with many Virginia business sellers. These are some of the most common questions we hear. If you require additional information about a business transaction matter, please contact us at your convenience.
What makes a top-tier business broker?
Business brokers who have handled a variety of company sales and have closed those transactions are often the most successful for their clients. They should also have a reputation for vetting and selecting prospective purchasers for their clients. Confidentiality is essential in this industry, so a business broker must have exceptional protocols put in place to maintain secrecy.
Maintaining an A+ Better Business Bureau rating is challenging for all but the most exceptional businesses. Additionally, the experience, associations, and educational backgrounds of the respective brokers are also relevant.
Virginia Business Broker
A Neumann & Associates, LLC offers superlative representation and advice to business owners in Virginia who are considering marketing their businesses to prospective buyers and investors. Contact us today to begin the process of selling your VA business.
If you are interested in any information mentioned above or for a free consultation on how A Neumann & Associates, LLC can assist you in buying a business in Jersey, selling a Business in Virginia, Business Valuation and Appraisal Services in VA, etc., don’t hesitate to reach out to us.
The A Neumann & Associates, LLC office in Northern Virginia is located at the following address:
A Neumann and Associates, LLC
Ashburn, Virginia 20147