Entrepreneurs are typically experts in their business and industry and it is therefore normal to assume that they have limited experience in the process of selling a business. The majority of business owners will only sell one business in their lifetime. Therefore, when the time comes to bring their company to market, there is a higher risk of being overwhelmed by the complexity of the brokerage process resulting in a lower than expected sale price when they are not accompanied by a business brokerage professional.
Our own research shows that the vast majority of businesses listed for sale in Quebec are not being represented by certified business brokers nor accredited merger and acquisition (M&A) advisors. Because of this, many businesses are sold on a regular basis with owners failing to receive maximum value. Many others are being sold in a do-it-yourself manner that also result in a lower payout for the owner. This lack of expert representation is one of the reasons that so many businesses fail to receive their full market value. In fact, according to Forbes, a staggering 70% of businesses listed for sale fail to find a buyer altogether.
At Avalon Partners, we only work with experienced and certified business brokers and M&A intermediaries. We believe that details do matter when it comes to selling a business. We do extensive research upfront and take you through an effective and systematic process which sets you up for success.
Determining the value of your business is an essential component in positioning it for sale and making sure you receive full market value. Some owners may have their own estimate of what the business is worth, but this number may be over-inflated due to their emotional attachment. Others may undervalue their business because they are not familiar with various valuation methodologies and which ones are most appropriate for their specific company.
At Avalon Partners, we believe that the best way to assess the value of your business is through a combination of rigorous, established valuation methodologies which we can also combine with proprietary assessment tools enabling us to benchmark your key business drivers with those of 65,000 other business owners.
Our approach uses market-based research and leverages comparable sales data from businesses similar to yours. Our methodology will not only provide you an opinion of value, but will also help you understand the key drivers impacting the value of your business and thereby enabling you to improve these prior to selling your business in order to further boost the saleability of your business.
We will craft a concise and compelling Confidential Information Memorandum (CIM) on your behalf which will be instrumental in communicating and promoting the unique value of your business to prospective buyers. This is a powerful marketing asset which will help educate and drive interest in your company.
This document is only shared in a carefully controlled and confidential manner to potential buyers who are approved by you. The objective is to provide buyers with a comprehensive overview of your business. The contents typically include the history of your company as well as details on your products and services, customers, sales and marketing activities, operations, management, key employees, a financial summary and analysis, a SWOT analysis as well as growth projections. We are also able to add stunning photography or videos to this package should you choose.
At Avalon Partners, we believe that our approach to crafting your Confidential Information Memorandum is second-to-none and a key differentiator in the Quebec marketplace. Our team has decades of experience in positioning the unique value of businesses across multiple industries and geographies and we welcome the opportunity to show you what we can achieve in this regard.
We will leverage the insights and the intelligence we have gathered with you to develop a highly customized marketing strategy designed to generate the maximum number of ideal buyers. Whether you are targeting buyers located across Quebec, Canada, North America, or World-Wide, our approach is designed to provide maximum exposure to qualified buyers in a controlled and confidential manner without compromising your identity. A comprehensive marketing strategy highlighting the unique value and attributes of your business can greatly increase the chances of success when selling your business.
We will supplement our marketing strategy by working with you to also identify and compile a list of target buyers whom you believe might be interested in acquiring your business. Should you have specific target buyers in mind, we will reach out to them directly and discretely to pitch your business.
The Avalon team have been leading sales and marketing initiatives inside and outside of Canada for over thirty years. In addition to our deep roots in Quebec, we have lead sales engagements across Canada, the US, Europe and Asia for over fifteen years.
Our affiliations with Quebec and Montreal-based regional associations are also invaluable in helping us generate interest from potential buyers locally. In addition to this, our international affiliations with the Alliance of M&A Advisors (AM&AA) and the International Society of Business Appraisers (ISBA) give us access to a network of hundreds of certified business brokers and thousands of potential buyers, which will enable us to increase your exposure whether you are looking to generate interest around the corner, or around the world.
A common concern of many business owners is that the market will find out that they are selling, or that the wrong people will get access to their confidential information. That’s why it’s so important to screen and qualify buyers effectively. Some brokers tend to distribute your information to anyone who enquires, or share your information across multiple platforms in an uncontrolled manner.
At Avalon Partners, until the buyer has been identified and properly screened, we will maintain a strict confidentiality policy. Our policy and approach is designed to assess their financial and operational capabilities to ensure that their motives are genuine. Our screening process is formulated to make sure that the buyer is not only in a position to complete the purchase, but is also motivated to do so.
Once we have established that a potential buyer has met the pre-established criteria, they will be asked to sign a confidentiality agreement. Only then will we provide the prospective buyer with the Confidential Information Memorandum and set up a meeting to provide an overview of the business and answer high-level questions.
After reviewing the Confidential Information Memorandum and demonstrating the capacity and motivation to move forward with the process, Avalon Partners will set up an introductory meeting between the seller and the buyer.
Only limited and carefully selected information will be shared. We make sure that sensitive materials are withheld until an offer has been made and that both parties are willing to move forward to the due diligence phase. Building trust with the buyer is essential to progressing towards a successful sale. Since difficult questions may be asked during the introductory meeting, it is important that the seller be ready to address these with honest and credible answers. Since Avalon Partners has invested the time to learn about the strengths and challenges in your specific business, we will be prepared to coach you in advance as to how to deal with any potential objections.
Many people think that a negotiation is won or lost in the final stage. However, we believe that we can greatly enhance the chances of having a successful negotiation through careful research and preparation at the very start of working with you. Additionally, it’s important to understand the priorities of both the seller and the buyer so that we can work towards a mutually beneficial outcome. We strive to work as transparently as possible to provide effective guidance and to avoid unnecessary conflict or misunderstandings.
Assuming the buyer has received all the essential information they require and are interested in moving forward with the purchase of your business, Avalon will support the negotiation on your behalf and seek the best possible price and terms. Our commitment to preparation and our expertise in negotiations means that we can often recommend solutions beneficial to both parties that keep the deal moving forward and increase the chances of a successful closing.
Due diligence is ideally a simple process whereby the buyer confirms the information supplied to them. But at times it can also uncover a range of questions and concerns that can either impact the valuation of the business, or worse, result in the collapse of the sale altogether. At Avalon Partners, we invest a great deal of time and effort at the start of our engagement with the seller to conduct our own internal due diligence so that we can identify any potential issues well before we reach the formal due diligence stage with the buyer. This ensures the process runs in a more effective manner with a higher chance of success at the end.
This is the final stage in the process of selling a business. At this point we will be finalizing the agreement as well as related conditions, escrows, or earn-outs. We seek to streamline the process by minimizing revisions to the contract and thereby reducing your legal fees. We work with your attorney to ensure this part of the process runs efficiently. If you don’t have an attorney specialized in business sales, we can introduce you to one that has the experience and skills necessary to ensure the best outcome on your behalf.
Once all conditions in the purchase agreement and escrow instructions have been satisfied, the sale of your business will be declared unconditional. Avalon Partners can also help to develop a transition plan aiming to minimize disruption and uncertainty for the employees, customers and suppliers of the business. After the closing, the seller will typically train the buyer for an agreed period of time to facilitate a smooth transition. Avalon Partners can also support this by providing a list of things that often need to be done before and after closing to ensure a smooth transition when you sell your business.
