FEATURED
CLIENTS
Sales & Management Training Organization
Profile #1513
This unique, well-established company is a sales and sales management training firm specializing in the design, development, and implementation of custom sales solutions. The company focuses on audience-specific training aimed at improving sales. Clients, located in the U.S., Europe, and Asia-Pacific, include notable Fortune 1000 companies. There is a highly trained and loyal staff and long time repeat customers. Currently based in Denver, but relocatable anywhere in the U.S.
Gross Sales.........$1,758,496
SDE.......................$460,352
For more information,
Contact Lynn Lage
or
Ron Brasch
Profitable HVAC
Mechanical Contractor
Profile #1713
This Southern Colorado company offers the full menu of mechanical contracting services for heating and air conditioning. Its customer mix includes commercial and residential. 2012 had strong profits and 2013 YTD has been even better. Revenue for the first seven months of 2013 is $1,751,748 with an SDE of $330,159. There is an established customer base, a well-trained and experienced staff in place, and prime real estate for purchase (already built-out for future growth) or lease. This company would make an appealing acquisition to (1) a buyer already in the HVAC industry, (2) a buyer in a related field such as plumbing or electrical contracting, or (3) someone experienced in construction wanting to live in this popular city.
Gross Sales ......$2,229,611
SDE.....................$270,697
Business Summary
For more information,
contact Ron Brasch
rb@fbb.com
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THE FBB GROUP, LTD.�
719-635-9000
800-395-7653
Email: fbb@fbb.com
www.fbb.com



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As I have indicated in recent, previous eNews articles, we are experiencing a strengthening market for business transfers. One of the characteristics of a strengthening market is Sellers receiving multiple offers for their businesses. For example, last month we successfully represented the sale of a steel fabrication business that had three interested acquirers. Ultimately, in our opinion, the business was acquired by the best buyer, but the presence of multiple buyers gives the Seller more options and leverage in negotiating a transaction. The sale of this business was particularly rewarding to me as I originally sold this business to the former owner ten years ago and he has accomplished his financial goals for a successful retirement.
This month's featured article is authored by my friend, David Mead, who owns a highly regarded consulting company in Denver that assists mid-size companies in building value and positioning them for sale. I believe that Dave is very articulate in his article, (which is typical of Dave) identifying some of the pitfalls of dealing with a single buyer. In fact, bringing multiple buyers to the table and orchestrating a sales process is probably the most significant value driver that an intermediary firm offers, as timing is critical and integrity is important to the process.
The majority of our business is derived from referrals. Please consider referring our services if you encounter a situation involving the potential purchase or sale of a business.
Sincerely,
Ronald V. Chernak
President
Inspiring business relationships since 1982!
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Trying to sell a business with only one prospective buyer is a bad idea.
By David Mead
Reprinted with permission from Issues for Growth
Doing a sale with only one prospective buyer is typically a bad idea. Recently, there have been a number of failed sales transactions where the seller negotiated with only one prospective buyer only to have the deal fall apart, or to have the sales price significantly lowered during due diligence.
Here are a few comments from disillusioned sellers:
- "We received an unsolicited offer for our business. The process wore on for more than nine months. Then the buyer just withdrew the offer and disappeared."
- "We were planning to start a process, but had a pre-emptive offer. Due diligence with the buyer dragged on and the price was adjusted several times. While we went ahead with the sale, when it was all said and done, we realized that the price we got was significantly lower than market. We obviously left money on the table."
- "I was tired. The last few years had been a grind. When I got an offer for the business, it seemed like my way out. What was presented as a fast track to close, became an ordeal. After a long process, I was worn out and wound up with a large amount of the price dependent on future earnings."
- "We received an offer to sell our business to a large competitor in our industry, orchestrated by one of our Board members. The sales process took over a year to finally get done. By the time the sale was completed, the competitor knew so much about our business that I felt we had no choice but to sell."
While there are some sales transactions with one buyer that have been successful, there are many stories of disillusioned sellers. Here are some of the reasons not to conduct a sale with only one prospective buyer:
- No price or terms competition. Competitive bidding will help reassure the seller that they are receiving the market value.
- No opportunity to engage an outlier. In a competitive bidding process, a buyer often emerges from outside the industry or with a different business model or value proposition which enables them to offer a significantly higher price than the usual suspects.
- No control over the process or timetable. With only one buyer, the seller has no leverage to move the process along. Time is the enemy of most transactions. Buyers may wait to see how risk factors play out over time. Buyers can have unreasonable demands for due diligence. Company performance may suffer.
Fundamentally, it's a question of leverage. Some may call it "keeping the buyers honest." Having competitive offers - even if there are only two offers - provides an alternative that can ensure that the process keeps moving and generally provides greater value for the seller.
�2013 The Mead Consulting Group, Inc. All rights reserved.
David Mead is President/CEO of The Mead Consulting Group. The 40-consultant firm, www.MeadConsultingGroup.com, based in Denver, specializes in working with CEOs and owners of small and mid-sized companies to help them create value and leverage business strengths to reach the next level of success: growth, improving cash flow, and maximizing value for exit. Contact Dave at (303) 660-8135.
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