Thinking About Selling the Business You Built in Hillsborough?
Most owners who call are not putting the company on the market next week.
They carry questions with no obvious answers. What is this actually worth? Is now a reasonable time, or should I wait two years? Could anyone else run it the way I do? What happens to my people? Can I look into this without word getting out? And after everything, what do I walk away with?
You can ask all of that without committing to anything.
Durham Business Brokers work with independent, owner-operated companies throughout Hillsborough and Orange County, and have done so for fourteen years. Contractors and trade businesses, restaurants, auto shops, landscaping and service companies, salons, print shops, general contractors. Half of our team has owned a business, which is a different education than reading about one.
Call Today 919-746-7038The Number on Your Tax Return Is Not the Same as Your Sale Price
Your tax return is built to keep your tax bill down. A buyer is trying to work out what the business earns. Those are two different exercises, and the gap between them is usually where your sale price lives.
Buyers work from normalized earnings. For owner-operated companies, that generally means Seller’s Discretionary Earnings. Start with taxable profit. Add back your compensation. Then add back the legitimate personal expenses running through the company: the vehicle, the phone, the insurance that is really yours. If it’s documented properly, it all comes back into the number.
Then you apply a multiple to that figure, and that’s where similar-looking companies separate.
Picture two heating and air companies in Orange County, both invoicing around a million a year. The first sells maintenance agreements, has a lead tech who runs every install, and spreads the work across a few hundred residential accounts. The second is the owner in a truck, quoting, selling, and closing every job himself, with a third of the revenue tied to one property management company.
A buyer can see how the first one keeps earning the week after closing. The second one comes with a question attached, and the offer reflects the question.
What moves the multiple: recurring revenue, how much of the operation depends on you personally, customer concentration, margins and the direction profitability is heading, how well the financials are documented, and what companies in your particular industry actually trade for.
The first step is finding out where your business stands today.
What Would a Buyer Need to See Before Making an Offer?
A buyer is not purchasing the business as it runs today with you inside it. They are buying the earnings that continue after you leave, and nearly everything they ask for traces back to that one question.
Here is what they will want to see:
- Clean financial statements
- Tax returns that support reported earnings
- Documented customer relationships
- Recurring or repeat revenue
- Employees and a management structure
- Transferable leases and contracts
- Equipment and assets
- Written operating procedures
- Limited dependence on the owner
You don’t need to have every box checked before calling. We can identify what matters most before the company goes to market.
A Quiet Sale Protects More Than Your Employees
Employees are the first worry owners raise. They should not be the only one.
Word gets out early, and it travels in several directions at once. Your staff starts weighing whether to stay. Customers start asking who will be handling their account next year. Competitors call the accounts they have wanted for years. Vendors get careful about terms. And a buyer who learns you are exposed will use it at the table, because leverage is leverage.
So the sale runs tight from the first day:
- Confidential marketing that never names your company
- An anonymous business description built around industry, size, and general area
- A signed nondisclosure agreement before any buyer sees detail
- Buyer screening for capital, background, and genuine intent
- Staged financial disclosure, released as a buyer proves out
- Controlled meetings held away from your business
- Discreet site visits scheduled around your staff and customers
The goal is to keep the sale confidential until you are ready to disclose it.
You Don’t Have to Know When You’re Going to Sell
There are two good reasons to call, and only one of them involves a date.
The first is straightforward. You are ready, or close to it, and you want to know what the next steps look like and what the business should bring.
The second is the one more owners should use. You are not ready at all. You want a number, and you want to know what would have to change before the business sells for what you believe it is worth.
That second call tends to be worth more, because time is the only thing that fixes most of what holds a price down.
Give yourself twelve to twenty-four months and you can:
- Get the financial documentation into shape a lender will accept
- Pull the daily operation away from depending on you
- Build recurring revenue instead of chasing one-time work
- Work down a customer concentration problem before a buyer prices it in
- Clean up the operational issues you have been living around
- Resolve the obvious problems a buyer would surface anyway
Give yourself six weeks and you can do almost none of it.
This is not an argument for waiting. Knowing your number early gives you options. Sell next quarter, sell in two years, or decide never to sell, but make that decision with real information instead of a guess.
When You’re Ready, We Handle the Transaction From Start to Finish
The path is the same whether your company sells for $300,000 or $3 million.
Valuation. We review the financials and give you a realistic range at no cost.
Preparation. We address what affects price and assemble the package buyers and lenders will ask for.
Confidential marketing. The business reaches the market without being named.
Buyer screening. Prospects prove capital and experience before they get near you.
Negotiation. Price, terms, what happens to your employees, and how long you stay on.
Due diligence. The buyer verifies what we presented, and we manage the requests so they don’t swallow your week.
Financing. Your business is pre-qualified with SBA lenders before buyers sit down, so funding doesn’t unravel the deal in month four.
Closing. Documents are signed, funds transfer, and you hand over the business on a date you agreed to.
How you finance the deal determines how much you hold on closing day. When a transaction is structured with bank financing, sellers commonly receive 80 to 90 percent of the purchase price in cash at closing, with the remaining amount determined by the transaction structure. Not every deal lands there, and we will tell you where yours is likely to land before you go to market.
Compensation is a success fee paid at closing, with the terms established in the engagement agreement before the seller commits.
Start With a Conversation, Not a Listing
You do not have to put the business on the market. You do not have to tell your employees. You do not have to decide anything at all.
You can simply find out what the company may be worth and what your options look like from here.
