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Cashing-In Part 3 – The 10-Step Business Sale Process
January 4, 2023
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SCORE TV Series Download Transcript

Today, we're presenting part three of a series of episodes addressing exit strategies. In part one, we explore the important considerations sellers must understand before exiting their business. In part two, our experts presented ways in which businesses are valued

Small Business 10-Step Business Sale Process

In this video, we're going to outline the steps in the selling process leading to a successful exit. This is a free-flowing dialogue on the first 5 steps. This is a must-watch video for anyone that is in the market looking to sell a small business now, or in the next few years.



What You Will Learn in this Exit Strategy Episode

In this video, host Dennis Zink and his two expert guests Peter Gruits and Matt LaPointe discuss the following topics:

Step one is arrange for a professional or business intermediary to represent your company. Why would a seller of a business want to do that?

Does SCORE function as a business intermediary for clients?

Step two is conduct an in-depth review of the business, including financials, leases, contracts, assets and liabilities. 

How does the SCORE exit strategy team get involved with conducting in-depth reviews? 

The third step is obtain a business valuation. Why is a business valuation necessary?

Step four is prepare a business prospectus. What should a seller include in their business prospectus?

Step five, develop a marketing strategy for selling your business. Why is that important?

Advice for removing relatives or having your children on the payroll.

Places that you would list your company for sale.

The due diligence process which is always lots of fun. Can you just explain briefly what that is?

SCORE Small Business Mentoring Advice Excerpts

“I think one of the biggest challenges any small business has is how to use professional services. Professional services are expensive. Professional services have a very unique niche. At SCORE we have a team of exit strategists who provide confidential, free and experienced mentoring. That in effect helps a client understand what the process is all about and how to prepare themselves for, as Matt says, the professional services. You have to know that if you sit down with an attorney, that clock's ticking. You have to know if you're sitting down with a CPA, that clock's ticking. And if you go to them as a blank tablet and you say, okay, help me out, that clock's ticking,” said Peter Gruits.

“So what we do at SCORE is not take away from the fees of the professionals, but say to the client, you have an opportunity to prepare to use a professional efficiently, and to use a professional efficiently means you need to know where you want to go. Where am I going, why am I doing this, how am I going to do this, and what are some of the things that I don't know that in effect SCORE can help me with. So that's why we set up the Exit Strategy program. I mean, Dennis, in your foresight on doing this, we really wanted to help existing businesses as much as we wanted to help brand new businesses. And so, that's why we went in this direction.” Gruits added.

Legal Small Business Sale Advice Excerpts

“You know, Peter and I were just discussing before the show how important it is to plan your exit strategy. I've found that if a client comes to me and says, I want to sell my business in the next six months or a year, I say you're too late. You should have been here five years ago. I mean, you really do need to plan your exit strategy. And so I would say, really, five years ahead of time is the time to start planning. So, when you talk about doing the in-depth review of your company, what we're looking at are of course from the legal side, we're mostly looking at contracts. We're making sure you have your management team under contract with appropriate non-competition clauses, with appropriate assignment of intellectual property clauses depending upon the type of the business of course. But, you know, the right kinds of documents in place there,” said Matt LaPointe, (attorney with Blalock Walters).

“If it's a business that's owned by more than one person, we have to make sure you have a good buy-sell agreement, a good agreement that discusses what happens when it's sold, how the two partners are going to handle that. You also want to look at intellectual property, do you have the appropriate copyrights or patents or trademarks. You want to look at the vendor contracts and contracts with your customers. This is what buyers want. Buyers want to buy a business that has all these things in place. A buyer is not going to want to buy a business where the three key employees have no contract and could leave the day after the buyer buys the business. So, this is the kind of in-depth review you need to do before you even think about marketing the business and talking about, talking with an investment banker or what have you. So those are the things that I would look for. On the financial side, mostly this would be handled by the CPA but I would get involved in this a little bit too. You want to see what do the tax returns look like. Has this company been doing a great deal of creative accounting? If they have, now's the time to clean that up before we go to sell,” added LaPointe.


Dennis Zink, SCORE Manasota Chapter Chair


Peter Gruits, Volunteer SCORE Mentor, Leading the Exit Strategy Program

Matthew LaPointe, Principle Blalock Walters P.A, a Sarasota and Bradenton, Florida law firm

Next SCORE Business TV Episode

The 10 Step Business Sale Process, Steps 6-10

SCORE Can Help

To get help with planning your exit strategy, request a free SCORE mentor by completing this form today!

SCORE Business TV is Sponsored by

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Cashing-In Part 2 – Business Valuation
Once you decide to sell your business, business valuation becomes one of the most pressing items. Don’t let your guard down. Make sure you have the right people guiding you through the exit process and helping you maximize your cash-out package. In this video, you will learn how a business owner can maximize the value of his or her company to get the most out of the exiting transaction.
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