FAQ

Frequently Asked Questions

When should I sell my business?
Timing is the key element. There is always a market for good, well-run businesses. Owner goals, along with company performance, are key to determining “the right time.”

It is typically easier to justify a higher valuation for a company on the upswing. You also need to determine how much money you will need (after tax) to continue to live your current lifestyle. If your objectives can be met, then the time should be sooner rather than later.

Do I need to hire an intermediary to sell my business?
Most owners know very little about the advisor’s role in a transaction. A good M&A intermediary will provide marketing, lead the sales process and negotiate on your behalf.

The benefit of having an intermediary work on your behalf is that they are not emotionally involved and can be objective about all terms of the sale.

It is also crucial for the owners to stay focused on running and growing the business so exit value is maximized. Let the industry professional focus on representing you, meeting your objectives and completing a successful transaction while you continue to run a successful business.

What is my business worth?
There are a host of factors that determine the value of your business. Some of these include timing, current market conditions, competition, government funding sources (both current and future), referral sources, revenue mix, gross margins, sales and earnings trends, size and location, just to name a few.

Mertz Taggart does not charge a fee to give you an opinion of the value of your business, with no obligation to engage us for future services.

What are buyers looking for in a business?
Ideally, buyers look for low risk and reasonable returns. Stable management, a diverse referral base and client base, favorable growth trends, good gross profit margins, systems that sustain growth, realistic growth strategies, financial controls and an appearance of business consistent with asking price are all viewed positively by potential buyers.

How long does it take to typically sell a company?
The time frame varies by company, but it typically takes 4-7 months to locate the right buyer, perform due diligence and close the sale.

What are the tax consequences of selling my business?
It depends on the structure of the sale as well as your corporate structure.  Typically LLC’s or S-Corporations have more favorable tax consequences when compared to C-corporations, but every situation is different. It is important to involve a CPA and a qualified deal-making attorney who has healthcare transaction experience.

Why do you specialize in the healthcare field?
Our background is in the health care field, so our expertise lies in that arena. Since we already have the specialized knowledge, we feel we can better serve our clients’ needs.

What is the size of agencies that you represent?
Typically we work with companies that have at least $1 million in expected selling price.

How much do you charge for your service?
We do not charge any up-front fees of any kind. We are paid a percentage of the selling price when the business actually sells. We feel this better aligns our interests with yours.

If I sign an agreement with you, do I have to sell the company?
You are never required to accept an offer, and have total discretion with regard to accepting or rejecting any offer that is presented.

Who do you represent in the transaction?
In most cases we represent the seller in the transaction.

Do you ever represent buyers?
We will engage with certain industry- and  financial-buyers to help them find qualified targets.

How do I sell my company without my employees, referral sources or competition finding out?
Maintaining confidentiality is paramount to a successful transaction and will have to be managed throughout the process.  We are sensitive to the issue and will work with you to maintain this, from the initial contact with buyers, to conducting due diligence, to key employee retention.

Why should I use someone who specializes in healthcare to represent my company?
In order to maximize the value of your business in the marketplace, the business must be presented properly to the right buyers who have the strongest strategic interest in your company.   You will need an intermediary who is immersed in healthcare and can maintain a clear view of the ever-changing healthcare landscape.  An intermediary who is talking with healthcare buyers on a daily basis to understand their respective growth strategies.

Why should I hire someone to help me sell my company?
Selling a company is a time consuming process that requires diligent oversight. You as the business owner should continue doing what you do best, which is running your business. It will be important to keep your business operating at peak performance prior to any sale.  You will need an intermediary who has experience managing confidentiality, negotiating terms and keeping the project on schedule while you continue operating your business.

Should I ask my accountant or attorney to find a buyer for my company?
While these two people are important advisors during the process, he or she will not be an expert in marketing companies, creating a competitive environment with multiple potential buyers, or negotiating the most favorable terms on your behalf.

If I pay for a professional valuation, will that ensure that my business sells for the highest price?

No. The current market  and competition among the right strategic buyers will determine the highest price someone is willing to pay for your business.

What is Adjusted EBITDA?
Conventional earnings before interest, taxes, depreciation, and amortization (EBITDA) revised to exclude the effects of mainly nonrecurring items of revenue or gain and expense or loss.

Why do some transactions not close?
The main reason a transaction does not close is weakening financial performance, especially if it is materially different from the original data provided to the buyer.

Some transactions don’t close because of a surprise that shows up during due diligence. It is critical to disclose any issues or potential problems up front. It is very difficult to regain the buyer’s trust once a seller’s credibility has been compromised.

Will I have to stay on after the sale? If so, for how long?
Typically the current owner(s) will stay on for a period of time to ensure a smooth transition. It may be in his current role or just as a consultant for some pre-arranged time frame. This could be for as little as 30 days up to a year, or longer. The former owners’ stay period and compensation are negotiated as part of the deal up front.

Where will the closing take place?
This typically depends on the buyers and their attorneys, however, most closings are done by wire transfer. Signature sheets are faxed to both parties after review by attorneys. After both sides have signed all necessary documents, the funds are wired into your bank account.

Please contact us for an initial assessment. Call (770) 888-1171 or click here.