Frequently Asked Questions

 

How long does it take to sell a business? Current industry statistics state that on average it takes 6-12 months to sell a business.  The length of the process often will depend on the abilities of the buyer and seller to keep the process moving forward.  Being organized to facilitate due diligence, having a buyer that is also able to move through due diligence, for both parties having the wisdom to negotiate critical points of a purchase agreement and not lose momentum to minutia.  Often financing and banking issues can add time to the process.  

Why do I need a broker / intermediary?  A successful intermediary should be able to accomplish too many critical benefits to a seller to attempt handling the process alone.  The intermediary will create competitive environments for buyers so in order to ensure that the seller will be able to choose the best possible buyer for their business with respect to price, ability to close, as well as which party may be best suited to success and the ongoing continuity and survival of the business.  A broker can provide discernment in evaluating true buyers from timewasters and worse.  Having a hired broker will allow the business owner to concentrate on running his/her business and thus protect its value.  No individual sellers can create the size of buyer pool that an Intermediary can in a way that will truly create a competitive process, and manage a process that will best protect the discretion and confidentiality concerns of the business owner.  The variation in offer prices between lowest and highest bidders can sometimes be greater than threefold in our experience!  That means dealing with only one buyer in a negotiation process can be a recipe for only realizing a 1/3 of your potential value!

How hard is it to sell a business?  In short: very difficult.  Industry statistics also state that 90-95% of small privately held companies that go up for sale DO NOT SELL.   There are some significant reasons that don’t apply to all small to mid-sized companies, as well as certain industries that have much higher success rates, but many of the challenges exist in every deal.  If a company is poorly performing, unless it is of proper size for turnaround experts, will be a very difficult to sell in most instances.  

What’s Your Success Ratio? Historically The Grasemann Group has achieved about a 70% close rate of our sell side clients.  The broker industry norm is consistently stated to be around 25%.  

What are some important things I can do to help sell and increase value?  Truly commit to the process of selling, select the best sell-side intermediary, be reasonable with expectations, keep good records, keep the business going strong; sell when business is going well, not on the decline.   Do everything you can to broaden your customer base in order to avoid customer concentration issues.  Try to view your business as a buyer would.  

 

What types of buyers do you deal with?  Since the Grasemann Group Ltd. serves the middle market and below, our massive buyer database includes virtually all major types of buyers in virtually all broad industry classifications.  Our database includes individuals and small partnerships, corporations (both private and public), private equity groups and other investment groups.