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FAQS

Still have more questions?

Here are our most Frequently Asked Questions sorted into three categories. Please take a moment to look around. If you don’t find your answers here, feel free to give us a shout.

How long will it take to sell my business?
It typically takes six to twelve months from the time you sign an Engagement Letter with us to the day of closing. We tell clients to mentally prepare for the selling process to take about a year, although our deals often close in six months or less.

You may need to build in more time to prepare your business for the selling process. If you think you want to sell your business sometime in the future, we recommend that you talk to us two to three years prior to your ideal sell-by date.

We don’t believe in rushing anyone through our process, sellers or buyers. It’s not about finding a buyer quickly, it’s about finding the right buyer that will meet your personal and business goals.

What will I pay in taxes?
This can be difficult to determine without an offer in place that outlines a proposed deal structure. There are so many variables that affect how your sale proceeds will be taxed that it can be a mistake to try and guess. (If anyone tells you you’re going to pay 40 percent no matter what, please talk to us.)

We can work through a few scenarios with you — with guidance from our in-house CPA — to give you an idea of what you might expect to pay in taxes. We can also discuss ways to mitigate, defer and/or lower the tax consequences from a sale. Just know that it will be a big part of the negotiation process with a buyer, and one of the reasons sellers hire us to represent them.

What types of buyers will be interested in my business?
This is one of the things we discuss with you after completing our valuation process. Most buyers fall into three general categories: entrepreneurial operators, financial buyers like private equity groups, and strategic buyers. We caution business owners to keep an open mind when it comes to buyers. Your “ideal buyer” may be someone you’ve never thought of. We work hard to attract several types of buyers for your business so that you can find the best fit for you and your business.
Will I get all cash at closing?
The short answer to this question is no. Most buyers will require you to keep some skin in the game, as will many lenders who are helping finance the acquisition of your business. Oftentimes this has as much to do with intangible reasons — like trust, confidence in the business and good faith — as it does with financing. The last thing any buyer wants is for you to sell them your business then disappear. With that said, we try to structure deals so that sellers get at least 60-80 percent of the sale price in cash at closing.
What is my business worth?
This is a great question, and one you need to get answered before you decide whether or not to sell your business. Please see our Valuation page and related FAQ’s for more on this important topic.
When is a good time to sell my business?
We’re so glad you asked this question! One of the ironies of small-business ownership is that the best time to sell your business is typically the time when you’re least likely to consider letting go of it. If you think of your business as an asset (like we do), you’ll want to sell at the peak. In general, buyers like to see at least three years of consistent growth and profitability from the operations of your business, as well as several years of future growth to capture within your business and industry.

Another way to answer this question is to mention when it’s a bad time to sell your business. If your business is experiencing the following, it’s probably not a good time to sell: declining sales and/or profit margins, industry as a whole is in trouble or waning, you passed the “burnout” stage years ago and have let things languish.

How will I tell my employees?
Most sellers list this as one of their top concerns, and we understand why. Rest assured that there is no right answer to this question, as it varies from owner to owner. We’ve met business owners who wait until the deal is done to tell employees, while others include a key manager to help with due diligence efforts, or even with the decision to sell or preparing to sell.
What if I don't want to sell now, but would like to sell my business in the future?
As mentioned above, if you think you’d like to sell your business some day it’s best to start planning at least two to three years in advance. We recommend that you get a business valuation immediately to see where your business is at today. That way we can work together to come up with a game plan to maximize value before going out to the marketplace and finding buyers for your business.

The reality is that both you and your business must be ready for the selling process. We will give you our honest opinion about your situation, and work with you to identify a reasonable timeline for the sale of your business.

How will buyers value my business?
Buyers view your business as an investment, and are frequently weighing the pros and cons of buying your business versus another. This is important to note, as more than likely you have not been viewing your business in the same light.
A common way to get an estimate of how a real-world buyer will value your business is to use a multiple of pre-tax earnings using comparable transaction data. We call this Market Value.

The multiple is determined by several factors, including the size of your business, your industry, operational performance at your business versus averages for your industry, future growth potential, and how much risk is associated with your business.

The earnings part of the equation is usually EBITDA, EBIT or adjusted NOI (Net Operating Income). In short, it’s the pre-tax earnings from the operations of your business. We analyze your financial statements and adjust them to show the true profitability from operations in the same way that a buyer would.

While valuation math seems fairly straightforward, it is far from simple.

What will I pay in taxes?
This can be difficult to determine without an offer in place that outlines a proposed deal structure. There are so many variables that affect how your sale proceeds will be taxed that it can be a mistake to try and guess. (If anyone tells you you’re going to pay 40 percent no matter what, please talk to us.)

We can work through a few scenarios with you — with guidance from our in-house CPA — to give you an idea of what you might expect to pay in taxes. We can also discuss ways to mitigate, defer and/or lower the tax consequences from a sale. Just know that it will be a big part of the negotiation process with a buyer, and one of the reasons sellers hire us to represent them.

What if the value seems too low to me?
It’s not uncommon for business owners to think their business is worth more than it really is to a buyer. There are a number of reasons for this, including the belief that you should be adequately compensated for all of the blood, sweat and tears that you’ve put into your business over the years.
For better or worse, the value of your business will be judged by its financial performance and future viability without you at the helm. There are a number of ways you can bolster the value of your business. We love working with clients for two to three years prior to selling a business so that we can put some measures in place that will get you maximum value and attract strong offers from buyers.
Do I need to have a business valuation done if I'm ready to sell now?
Even if you’re ready to sell yesterday, it’s still beneficial to go through a mock due diligence exercise like our business valuation before jumping out into the marketplace. Our business valuation will help you anticipate what buyers are likely to offer you for your business in terms of a purchase price, as well as what questions they are likely to raise. The more you can prepare yourself and your business for the scrutiny of a buyer, the higher your chances of getting a successful deal closed.
Is the Allan Taylor & Co. business valuation certified?
No, our business valuations are not certified. We use a real-world buyer simulation that you can use to help you make decisions about selling your business — now or in the future — and give you some insight into what drives value in your business, and what detracts from it. Our business valuation is not meant to be used in instances that require a certified business appraisal.
What if I need a certified business valuation?
If you’ve been told that you need a certified business valuation, we would be happy to recommend a number of specialists that you can choose from. Just shoot us an Email and we’ll send you a list of capable providers.
How often should I have a business valuation done?
We recommend that all business owners get a valuation done at least every two years. Your business is your most valuable asset, and there are a whole host of reasons why you should know what it’s worth at all times.
What is the cost of your business valuation?
The fee for our Business Value & Sellability Assessment starts at $3,500 (additional charges may apply). Turn-around time is approximately two to three weeks after we receive all of the information requested.
What kinds of clients does Allan Taylor & Co. work with?
Most of our clients are founders of successful businesses with between $1M and $40M in annual sales and up to $5M to $6M in pre-tax earnings. Their reasons for wanting to sell vary from retirement, to wanting to start a new venture, to simply being done with the rigors and responsibility associated with owning a business.

The majority of our clients are looking for a complete buyout, although others just want to “take some chips off the table” by having a partial exit or liquidity event. We also work with business owners who believe that selling all or a majority of their ownership is the best path forward for their business to grow (i.e. the business is poised for growth, but a new owner will need to take it to the next level).

What will I pay in taxes?
This can be difficult to determine without an offer in place that outlines a proposed deal structure. There are so many variables that affect how your sale proceeds will be taxed that it can be a mistake to try and guess. (If anyone tells you you’re going to pay 40 percent no matter what, please talk to us.)

We can work through a few scenarios with you — with guidance from our in-house CPA — to give you an idea of what you might expect to pay in taxes. We can also discuss ways to mitigate, defer and/or lower the tax consequences from a sale. Just know that it will be a big part of the negotiation process with a buyer, and one of the reasons sellers hire us to represent them.

What types of buyers will be interested in my business?
This is one of the things we discuss with you after completing our valuation process. Most buyers fall into three general categories: entrepreneurial operators, financial buyers like private equity groups, and strategic buyers. We caution business owners to keep an open mind when it comes to buyers. Your “ideal buyer” may be someone you’ve never thought of. We work hard to attract several types of buyers for your business so that you can find the best fit for you and your business.
Are you business brokers?

We are not business brokers. Most business brokers run their firms on a real estate model (commission only), and favor quantity over quality. In other words, they take as many listings as they can and hope that a handful of deals close. Industry statistics show that only 11% to 20% of businesses listed with a business broker ever sell.

Allan Taylor & Company takes a different approach, bringing investment-banking level services to lower middle market M&A. We’re typically working on six to ten transactions at any given time; focusing on a small number of deals allows us to give you and your business the time and attention you deserve. Due to our careful selection, preparation and adherence to a proven process, our close rate is consistently over 80%.

Unlike business brokers, we take a consultative approach to helping you with the sale of your most valuable asset. If we think now is not the best time for you to sell or that selling may not be your best exit strategy we will tell you. We’ll never sell you on selling your business, or use high-pressure sales tactics of any kind.

We call ourselves M&A Advisors. Whatever you call us, just be sure to call us if you’ve built a fantastic business that deserves the best available representation in the marketplace when it comes time to sell.

How are your fees structured?
We start every engagement with our business valuation, which is a stand-alone service with its own fee. If you engage Allan Taylor & Co. to sell your business, we charge an upfront retainer upon signing. There are no others fees until we sell your business, at which time we earn a Success Fee. (Our upfront retainers are nonrefundable, and are typically $5,000 to $10,000 depending on the size of the business and scope of the work involved.)

Our Success Fee is calculated based on the total transaction value when a business is sold. We charge 10% of the total transaction value for businesses that sell for $2M or less. For businesses valued at $2M+ please contact one of our advisors to discuss.

One of the things that makes us different is that we are willing to work on a flat-fee basis as opposed to a percentage. Oftentimes agreeing on a flat fee can take some of the complexity and uncertainty out of M&A fees, making a deal go smoother as it nears completion. Rest assured that we will have an open discussion about our fees before you engage us to help you sell your business.

Why do you charge an upfront retainer?

Allan Taylor & Co. has developed a reputation for producing the best marketing materials available at this level of M&A (<$6M EBITDA). We regularly receive compliments on our work from private equity investors and buyers of all kinds, lenders, CPA’s and attorneys. Quite simply, it’s what we’re great at.

In order to give you and your business the representation that you deserve and attract the highest-quality buyers it takes us four to six weeks to create marketing materials that meet our standards. The upfront retainer offsets some of the time and hard costs associated with this very important work; work that needs to be done before we go to market and the real work starts!

Beware of trying to save money by using a business broker who doesn’t charge an upfront retainer. They will be incented to do as little as possible on the front end, which precludes them from doing the work required to attract high-caliber buyers. They also have a tendency to slam a deal together quickly in order to get their fee. You get what you pay for, as the saying goes. This is not the time to cut corners.

How do you work with out-of-state clients?
We’ve been working with clients from across the country since 2009. While most of our clients are located in the south central U.S. — specifically Arkansas, Missouri, Oklahoma, Texas and Louisiana — we’ve worked with clients from Oregon to New York City and many points in between.

We’re comfortable working remotely, and can get a deal closed with minimal travel involved. If you’re unsure about whether or not we’re a good fit, please give us a call to discuss.

How do you find buyers?
Allan Taylor & Co. has a number of ways to attract buyers for your business. We subscribe to national online databases and marketplaces that list businesses for sale, have our own internal mailing list of buyers and have developed a national network of advisors and professionals who work in M&A and search for acquisition targets. We also use the connections we’ve built through social media, and work with clients to develop targeted lists of strategic acquirers.

Many business brokers and M&A advisors claim to have a national network. If so, we encourage you to get more information about what that means. In our case, we have carefully curated a national network — and gained a national reputation — through the work we’ve published in the New York Times, Forbes and Inc. Magazine to name a few. We have a large following through social media channels like Twitter and LinkedIn, and are routinely asked to speak and contribute as thought leaders in middle market M&A.

We will discuss the many ways in which we can attract high-quality buyers for your company, and ensure that you are comfortable with our methods well before we go to market.

How will you market my business for sale?
As mentioned above, our marketing materials are second to none. The two primary marketing documents that we create are the teaser (a one-page blind profile of the business), and the Confidential Information Memorandum (CIM). The CIM is approximately 25 to 30 pages, and tells the story of your business and the opportunity associated with an acquisition. It contains enough information for a buyer to determine whether or not to move forward and make an offer to buy your business. Only serious buyers who have been qualified by us — both operationally and financially — and have signed a Nondisclosure Agreement are allowed to view the CIM.

Again, the quality of our marketing attracts exceptional buyers. We’ve had a number of buyers say that, out of the hundreds of CIM’s they see in a year, ours make them stop and want to learn more about a client’s business. We’d be happy to provide you with examples of our work, and encourage you to do the same for any and all of the M&A advisors or business brokers you are interviewing.

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