Would you like to sell your business?
With our past experience and success in selling businesses throughout Winnipeg and Manitoba, our aim is to offer a high level of professional service which is tailored to the exact needs of your business. Our fresh, innovative and progressive approach is unrivaled in the industry and delivers maximum shareholder returns.
Selling your business could be the most important and largest financial transaction you will ever make. For many owners, selling the business they’ve spent years building up can be emotionally difficult and at times extremely stressful. Unless you have sold other businesses previously, you will have no other experiences to draw on and will need to bring an expert in to guide you through the process.
The OConnor approach to selling a business is to maximize shareholder value. This is achieved by fully understanding the value of your business, and then proactively marketing the benefits to strategically motivated purchasers. By generating a significant number of strategically motivated buyers for our clients, we control negotiations at each step resulting in significantly improved sale prices, shorter timelines, and the most favourable terms possible.
Focusing on businesses valued between $100,000 and $40 million, OConnor’s team of Brokers brings the personal experience of buying and selling their own businesses along with their strategic consulting backgrounds.
OConnor Brokers are passionate about delivering maximum value for our clients, and our unique and proven approach reflects this. Our approach to maximizing shareholder return is different with every engagement, each being tailored to your exact needs. We will immerse ourselves in a select few projects at any one time to achieve the right result.
1. Understanding seller’s motivations
2. Articulating business value
3. Strategically motivated purchaser
4. Competitive environment
5. Due diligence
The value of a business is based on two things: what it owns and what it earns.
What It Owns
A business has tangible and intangible assets. The tangible assets are the furniture, fixtures, equipment, inventory, and real estate. The intangible assets can include the trade name, contracts, leases, client lists, licenses, recipes, and patents.
What It Earns
A business provides a certain financial benefit to the owner. The benefit generally comes in the form of business profits and a salary to the owner. It can also provide the owner with fringe benefits such as health insurance, a company car, or a retirement plan.
How Value is Calculated
There are different methods used to determine the value of a business. Some methods are straightforward, others very complex. For simplicity sake, we list some of the more straightforward methods used:
* Business Value is based on the value of the assets of the business, or the assets of the business plus one to three times the earnings. If the earnings are stable and growing, the value is on the higher end. If the earnings are variable or declining, the value is on the lower end. This method is more commonly used on owner-operated businesses with sales on the lower end of the spectrum.
* Businesses with sales of $1 million to $10 million may sell for straight earnings multiples of three to six. An investigation of the financial information is required to uncover the true earnings capability of the business. Again, if the earnings are stable and growing, a higher multiple is used. If the earnings are variable or declining, a lower multiple is used.
* Businesses with sales of more than $10 million often have specific industry criteria, which may be applied to determine the value. At this level, Buyers may be paying for market share, rights to patents and processes, additions to product lines, or the benefits of strategic or administrative consolidation.
Rules of Thumb
Most industries have one of more rules or thumb. However, they can vary widely and in most cases do not give an accurate value of a business. Since each business is unique, a particular rule of thumb can be off by as much as 100% or more. The business valuator will be able to decide what is the most relevant information about a business and then make an informed decision about its value.
The Value of a Business Valuator
Business valuation is as much an art as a science. While a business valuator does employ standardized formulas and methods to calculate value, it is most effective to work from assumptions that are based on his experience in the market place and his familiarity with the similar businesses. This process includes the selection of the most appropriate risk and return variables. In this way, the applied expertise leads to the best calculations of value for a specific business.
Using a Business Broker on the sale of a business has a number of distinct advantages
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