Start With the Number a Stranger Would Pay
Owners think about selling for many reasons. Some want to retire, a partner is leaving, or a buyer called out of the blue and nobody could say if the offer was fair.
Every one of them needs the same first fact: what a buyer with money and no history with your company would pay. Ask too much and the listing goes stale. Ask too little and the buyer pockets the difference.
A broker who sells companies in south central Kansas can show you a realistic range and explain what pushes it up or down.
Buyers Pay for Profit, Not Sales Volume
Earnings that can be proven are what buyers value. A company with seven million dollars in sales can still sell for around two million when margins run thin.
When the owner works in the business, brokers use seller's discretionary earnings, the cash one working owner could take home. Bigger firms with managers in place are priced on EBITDA instead.
Most Main Street companies trade at roughly two to three times that cash flow. Where yours falls depends on risk, such as how much rides on you and how concentrated your customers are.
Our note on add backs buyers accept and add backs they cut shows how that cash flow figure gets built.
The Air Capital Sells More Than Airplanes
Aircraft makers and their suppliers shaped the local economy, and a whole layer of machine shops, tooling firms and inspection companies grew up around them. Farm country, oil patch work and trucking add more.
That mix feeds contractors, restaurants, supply stores and clinics too. Each draws a different kind of buyer, and our what sells here pages explain what each buyer checks first.
Signs Your Company May Be Ready
- Yearly sales near one million dollars or more
- Tax returns and internal books that tell the same story
- A team that keeps things moving while you are away a week
- No single customer making up a big slice of sales
- A lease, or a deed, that is written down and current
If a few of these are missing, you now know where to start. A broker can tell you which gaps cost real money and which ones buyers overlook.
How Long Selling Usually Takes
Plan on seven to nine months from signing with a broker to closing. Six months counts as fast, though many owners feel it drags even when the sale is moving at a normal pace.
Keep the company performing the whole way. A slump worries buyers, and a sudden jump right before listing makes them suspicious. Steady results sell best.
How the buyer pays also shapes the schedule. Our note from signed offer to closing day walks through what happens in between.
Why Owners Use a Broker
Most owners sell one company in a lifetime. Many buyers have done it before and know the terms by heart. A broker evens the match, screens buyers, protects your privacy and creates competition for your business.
Some owners balk at the fee. Taxes on a sale usually cost more than the commission, and a good broker often earns the fee back in a better price or a deal that survives diligence.
A broker also keeps you from signing a letter of intent with a buyer who phoned you directly. Those offers often come from people hoping for a bargain.
Who Sees Your Details
We send your answers to one brokerage partner, and we may be paid a referral fee. Nothing about your company reaches a buyer without your approval, and the first call carries no commitment.