DGN Advisory has worked with multiple industries accumulating a large amount of experience for the purpose of preparing our clients for the sale of their business. We know what documents & statements your business will need in order to smoothly skate through the exit phase. Over time we have developed a set checklist that bankers or investors would like to see and DGN Advisory will utilize this gained experience to get the most out of the negotiation phase for your company.
Typical steps involved in Preparing the Business for sale:
Prepare a Valuation
DGN Advisory can offer multiple levels of Valuation depending on your companies budget and personal needs. We can offer a discounted quick valuation, a full-blown business valuation, or obtain a fair market value of your business. The benefits of a formal Valuation can leave you (the business owner) with an actual understanding of where your company is valued at. Large companies typically overvalue their business and small company owners normally undervalue theirs. Having an accurate formal business valuation can highlight areas in your company that could be strengthened in order to increase overall company value.
Decrease Owners Dependence
Can the company continue to function efficiently & prosperously without the owner? Reducing the company dependence on its owner can increase the overall value of the company in the eyes of the buyers. DGN Advisory will examine your overall company through its employees to highlight certain personnel that may benefit the company with added critical responsibilities. A buyer quite simply does not want to buy a company that can only be run by one individual. We will ensure that proper training is set in place from owner to buyer in order for the continued growth of the purchased company.
Assess Owner Compensation
During this phase, we examine the owner's salary that they are taking year to year and comparing this number to the overall fair market value of the company. If the owner has been taking a higher salary than what the company is valued at, then this suggests an error in the company's reported earnings. This can decrease the company's value. We also will analyze the owner's benefits during this phase. We take a look at possible excessive company expenditures and certain purchases that could be done personally. This will also increase the company value for the buyers.
Develop a Confidential Information Memorandum
DGN Advisory knows what pertinent information to include in a formal selling Memorandum and we can formulate this extremely important document consisting of your companies information in a timely manner. There are multiple benefits to developing a formal selling memorandum. A smoother transition through due diligence efforts, increase the buyer's confidence and highlight certain strengths and weaknesses within a company.
If you are considering selling your company, then it's extremely important to go through the preparation for sale checklist one to two years in advance. After all of the information gathered for the selling memorandum, one can notice positive or negative changes in company value and can address areas that may be decreasing the company value early on.
DGN Advisory has built an extensive CRM from working with multiple industries throughout Northern Michigan. We can help narrow down and choose the right buyer to get the most out of the sale of your business. We can save you time and money by only approaching potential buyers that fit your price. DGN Advisory understands that your company or business is very important to you and we will reach out to the best applicants with professional discretion and integrity in mind.
Negotiating the Transaction
Negotiating the transaction of the business can be one of the most fundamentally important steps in exiting your business. DGN Advisory's team has been involved with multiple negotiations ensuring the best possible outcome for our clients. Through our extensive process of the preparation of the business for sale, we will make sure there are no hidden variables that can arise to damage the deal. DGN Advisory will make sure to prepare all of the necessary documents for a smooth transition from Seller to Buyer.