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The Three Pillars of a Successful Business Sale

Ensure business continuity, get the best price, and maximize closing certainty.

The Three Pillars of a Successful Business Sale

RCA Brokers · February 11, 2024

5 MIN

Selling your business is a true balancing act, much more than just a matter of price.

To capture its full value and avoid pitfalls, three pillars must remain at the forefront throughout the process: (1) ensuring the business's continuity, (2) obtaining the best price, and (3) maximizing the probability of closing the transaction.

Neglecting a single pillar puts your transaction at risk.

An experienced business broker keeps these three pillars central to their concerns.

They ensure they remain perfectly aligned throughout the entire process.

Their job is precisely to protect the business, the seller's assets, and the smoothness of the process.


Pillar 1 – Ensuring Business Continuity

For an entrepreneur, the continuity of their business means it continues to operate.

It continues to serve its customers and take care of its employees, even after their departure.

To achieve this, existing employees must remain with the organization throughout the sale process.

The buyer relies on their skills, knowledge, and experience to continue operations.

The sale process must remain strictly confidential to avoid any disruption that could undermine team morale or, worse, lead to departures.

How can this be achieved while searching for the right buyer?

A broker, first and foremost, qualifies potential buyers without even mentioning your company.

Subsequently, they present your business to targeted buyers while securing confidentiality through strict non-disclosure agreements and a minimalist communication plan.

Only necessary individuals have access to sensitive information.

Your employees thus remain focused, and your business continues to perform.

Your Starting Point

A business valuation is your starting point for a successful sale.

A fair market valuation helps you reduce your tax burden, maximize your company's value, and strategically plan for the post-transaction period.

GET YOUR FREE VALUATION

Pillar 2 – Obtaining the Best Price

Obtaining the "best price" is not just about the number written in the letter of intent.

The amount that actually ends up in your pocket depends on four variables:

  • The transaction structure (exemption, capital gain, dividend, or deferred payment).
  • The advertised sale price.
  • The disbursement (cash payment, vendor take-back, earn-outs).
  • Working capital (seasonality, cash, inventory).

How can this be achieved while maximizing the price obtained?

A broker begins with a solid valuation to set realistic expectations.

They design a clear presentation and a narrative that puts the seller in a strong position.

Then, they get a financing structure pre-approved, limiting obstacles and delays.

By proving with supporting figures that the buyer maintains a good return, they justify your price.

They bring competition into play to achieve the best balance between amount, terms, and certainty of closing.


Pillar 3 – Maximizing Closing Probabilities

An agreement is only valuable if it is signed.

Maximizing closing probabilities means transforming a letter of intent into a completed transaction.

For the seller, the worst-case scenario involves last-minute adjustment requests from the buyer.

Imagine having to make concessions at the last minute to save the deal, or worse, an aborted transaction forcing you to return to the market in a weakened position.

How to increase the chances of closing?

By working with a broker compensated only when the transaction closes, you are assured that every detail will be addressed promptly.

Unlike other professionals paid by the hour, a broker has an interest in resolving all potential obstacles to closing the transaction as quickly as possible.

This compensation model makes your broker a true ally, whose interests are fully aligned with yours.

Key takeaway: Always keep the three pillars in mind: continuity, best price, and assured closing.

An experienced broker will help you orchestrate a winning sale at every step.

It all starts with a professional valuation of your business

At RCA Brokers, we take the sale of every client's company to heart.

You can rely on our experience to guide your reflection.