In my recurring nightmare, I have an accepted offer for my business. I believe I have properly planned and decided to sell my business. I have hired and surrounded myself with a great team of experts, including key family members as a sounding board, a mergers and acquisitions (M&A) business consultant, a certified tax accountant and a business transaction attorney.
It all seems good and manageable, but suddenly the buyer demands that we close much faster than I anticipated, and I don’t think I can manage. My heartbeat speeds up and my thoughts start racing: What should I do? Did I focus my time and attention correctly, or are there some critical items I overlooked?
My anxiety is palpable, and I start second-guessing everything I’ve done so far. Did I make the right decision to sell my business? Is this normal or is my buyer unrealistic with their timeline? Should I try to slow things down or figure out a way to keep pace? What can my team of experts do to help me? Am I even ready to sell? How did I get to this point and what should I have done in advance?
I wake up in a cold sweat, and it takes a few minutes before I realize it was only a bad dream. I still have time to approach the sale of my business in a logical, orderly fashion. So, I get to work.
8 Places to Prioritize Your Time
All the questions I asked myself in my dream are very normal and extremely manageable, as long as I have a working plan. And if these feelings sound familiar to you, the good news is you are not alone; there are many things you can do in advance to help keep the process flowing and stay on track in the future. Let’s do a deeper dive.
First, remember the reason you decided to sell your business; maybe that’s quality of life, retirement, position burnout, performance of the business (high or low), new opportunities, health issues, cash flow challenges, staffing problems, something else — or all of the above.
Whatever the reason, here you are! You have worked for so long, for so many years to build your business, and now it’s time for you to reap the rewards. So, when the stressful reality of selling your business kicks in (and it inevitably will, even if it comes in the form of a bad dream), you will be ready, and yes, you will get through it.
Here are the major things you should spend your time on:
- Continue to run the business as usual. Keep your team engaged and customers safe and happy.
- Maintain your fleet.
- Manage your margins and expenses properly.
- Address any employee and customer issues.
- Prepare your facilities and customer sites for due diligence. Do you have the proper paperwork to ensure you are in compliance? Are things orderly and neat?
- Decide on the right time to notify key employees of the pending sale.
- Provide your business consultant with the necessary documents and information a buyer will need. Let the business consultant guide you through this process.
- Carry out the due diligence process before your buyer does. This is a great way to circumvent any surprises that may arise.
16 Pieces of Information to Gather
The buyer will be asking for a flurry of information and documents; however, your business consultant has been down this road many times before and will be properly prepared to share the requested information in a secure data room or file. By providing your business consultant with all the key materials in advance, you can avoid the craziness of last-minute information gathering and the stress of urgent timelines.
Here is a list of information you should gather in advance to keep the process more manageable:
- Company legal information (legal name, ownership profile, legal structure, articles of incorporation, etc.)
- Key things a buyer should know about your business (gallons by customer type, storage, vehicles, other operating assets and real estate agreements, other income, customer counts, company-owned versus customer-owned profiles, automatic versus will-call delivery, etc.)
- Financial summary (revenue, margins and EBITDA trends)
- Delivery territory
- Copies of all necessary permits and licenses held by the company or its employees
- A list of customer agreements of all types (customer delivery, tank rental, rack rental, pre-buy, fixed price, cost-plus pricing agreements, service contracts, etc.)
- Copies of all propane supply agreements
- List or copies of all vendor contracts you have entered, both written and oral
- Gas check (or similar) forms
- Copies of all insurance policies maintained by the company, as well as loss-runs for the last five years
- Employee and payroll reports, including job descriptions and years with the company
- Vehicle list/truck files/vehicle titles
- Accounts receivable aging reports
- Competition overview
- Profit and loss and balance sheets
- Business/owner non-recurring expenses that a buyer would not have if they purchased your business
All these listed items take time to gather — and rest assured, every prospective buyer will want to see them. The process can seem daunting, and it can feel as if you’re moving at warp speed if you don’t prepare before listing your business for sale. Your business consultant will work with you to obtain this information and will then re-create it in a way a potential buyer will want to see it.
Remember: This is supposed to be the highlight of your business career, the reward for all the sleepless nights — not the cause of them — and the tireless hours of commitment and dedication to a dream you started many years ago. With the right team by your side, the proper preparation, a positive attitude and an understanding that although situations will arise, you can and will get through them, this will be a manageable and hopefully smooth process. And your dream — not your nightmare — will come true.