Sell Your Business

Why sell your business?

You've built a profitable business and have spent years riding the roller coaster up and down. It may be time to move on and pass the baton to a new owner. The economy is seeing a large upswing in business purchases. Individual entrepreneurs, search funds and Private Equity funds are all looking to build on the successes of a business owner that wants to exit, as opposed to building a new business on their own. Of course, these individuals and investors pay a premium for the hard work that a business owner has put into starting a business, but they look to recoup their acquisition cost within 2-5 years.

What does selling your business consist of?

Most businesses sell their companies through the help of a business broker. The broker knows a number of investors, individuals, and companies that are looking to acquire businesses. At Toa Acquisitions, we performed the function of a business broker for many incredible deals. In the end, all parties (the buyer, the seller and the broker) will leave the deal with a smile on their face because everyone got what they wanted out of the deal.

To complete a deal, you will negotiate a price with your buyer, along with any other expectations, such as duration of transition/training time, earnout potential(getting paid more or less based on the ultimate financial performance of the company in a given time), and employee retention plan. A lawyer, accountant, and broker may be involved in the transaction to solidify everything that has been negotiated in the deal. Expect a deal to close no quicker than 6 months from the time you bring it to market. You may be able to close a deal faster by finding a single buyer that has money in hand and all expectations align.

How much is my business worth?

With few exceptions, Toa Acquisitions aligns its valuations of businesses with the majority of the market, looking to pay 2.5-4x of a company's annual earnings (SDE or EBITDA). That means that the biggest factor in valuating a business for us to acquire is how much money goes back to the owner at the end of each year. The higher the earnings number, the more like that we would pay 4x for the company. Additionally, other factors that provide a 4x justification are the maturity of the processes at the company, the growth potential of the industry, and the quality of the people.

Interested in selling your business?

We'd love to take a look at your business and give you a free assessment and valuation. Reach out to us at info@toaacquisitions.com.