How to Sell a Business in Fort Worth, TX

How to Sell a Business in Fort Worth, TX

A Fort Worth, TX business broker helps business owners in Fort Worth and the surrounding cities sell their company. In this review, we take a close look at how Fort Worth business owners can effectively and efficiently sell their company for fair market value through the use of a qualified and experienced business broker. 

Determine The Value of Your Fort Worth, TX Business

The first step to any business sale is a professional valuation. Without one, you cannot justify your asking price with buyers, and you may sell below market value (or not sell at all). There are different types of business valuations; the method your broker recommended depends on the type of company you have and the stage in the sales journey. Here is an overview of the three types of valuations:

 

The market approach is most common for exit strategies when selling to an outside buyer. This is because it determines how much a fair and reasonable buyer is most likely to pay for your company. In other words, it determines your market value. Your broker should review recent business within Fort Worth, TX, specifically within your own industry and subsector. They will also calculate financial metrics such as your seller’s discretionary earnings (SDE) and earnings before interest, taxes, depreciation, and amortization; these metrics are important for potential buyers. 

An asset approach focuses on the net value of your company’s assets. This may be included along with a market approach. In many cases, an asset-based valuation occurs during the due diligence stage of a business sale as well. An asset value is rarely used in place of a market approach, although this may be an option for certain business types, particularly those whose value is primarily driven by their assets rather than their company profits. An income approach, as the name suggests, focuses on the company’s income and does not take into consideration the company’s assets or existing market to the same extent. 

Plan Your Exit Strategy and Prepare for The Sale

There is still more to do before you seek a buyer. Notably, you should establish your sale goals, discover the long-term vision you have for yourself and your company, and prepare your legal, financial, and operational documents. Specifically, the documents you will need to prepare include:

 

  • Federal tax returns
  • Profit and loss (P&L) statements
  • Balance sheets
  • Cash flow statements
  • Business license(s)
  • Patents, trademarks, and copyrights
  • List of employees
  • LIst of assets and equipment
  • Real estate appraisal(s) and/or lease(s)
  • List of suppliers
  • Customer lists (with percentages of sales for each)

 

It may take some time to prepare the documents, but it helps avoid setbacks and ensures due diligence goes well. Additionally, your Fort Worth, TX business broker will work with you to develop your goals for the sale (which includes your asking price and negotiating leverage) and will help you decide what to do after you sell. Your long-term vision helps you remain focused and remember why you are selling through the sales process. 

 

Find Potential Buyers in Fort Worth, TX and Negotiate a Deal

Finding a buyer is perhaps the most critical job of the business broker. Although it is crucial to have a sound valuation and be able to navigate the legalities and complexities involved with a business sale, it means nothing if the business broker cannot find a qualified buyer who is willing and able to pay fair market value to acquire your company. With that said, your broker should handle this stage for you.

 

Specifically, your business broker should leverage their private database, along with their connections and contacts in Fort Worth, TX. They should also facilitate negotiations between the seller and the buyer. Both sides may start far apart in terms of the purchase price. The Fort Worth business broker should find a fair and reasona311FF432 34F6 4A11 AFA6 CED2B4C4746A 1 105 cble median.

 

Of course, with that said, they first and foremost represent their client. In the event their client is the seller, then they should do their best to negotiate the most generous purchase price and/or terms for the purchase. This may involve leveraging competing offers against one another, among other negotiating tactics. 

Complete Due Diligence and Close The Sale

Ultimately, your Fort Worth business broker will finalize a deal with a buyer you trust and for a purchase price with which you feel comfortable. The deal is secured once a buyer signs a letter of intent (LOI). Although this is often a non-binding document, it provides enough certainty to move forward with due diligence. 

 

Due diligence is the period of time between the LOI and closing the sale. During this period, the buyer may request a series of documents (such as those discussed above), provide a list of questions for the seller to answer in writing, and meet with the seller once per week over the duration of due diligence. 

 

The buyer should work with efficiency to complete due diligence in a timely manner. Every day that passes is another day that the deal could fall through for unforeseen circumstances. Of course, the business broker should guide the process and may use a due diligence map to ensure a thorough yet speedy process. 

 

The next step is closing the sale. This involves reviewing the purchase agreement and attaining the seller’s and buyer’s signatures. The buyer will also complete the payment (either directly or via an escrow agent) after signing. Lastly, the seller will transfer ownership of the company and fulfill their obligations as it pertains to training the new ownership. The extent to which training is required is discussed during negotiations and due diligence. 

Are You Selling Your Business in Fort Worth, TX?

Sigma Mergers and Acquisitions offers free valuations. You are not obligated to make any commitments or pay for the valuation in any way. If you are planning your exit strategy and/or are ready to sell your company in Fort Worth, TX or the surrounding area, then contact us today. Sigma Mergers & Acquisitions is the leading Mergers and Acquisitions, Business broker advisory firm based in Dallas Texas and focused on Fort Worth (DFW) and all of Texas. Sigma specializing in facilitating strategic transactions for businesses across diverse industries. Our seasoned team of experts meticulously navigates clients through the intricate process of Business brokerage, mergers, acquisitions, and divestitures, ensuring seamless transitions and maximizing value. With a client-centric approach, we offer tailored solutions designed to meet the unique needs and objectives of each organization. Our comprehensive suite of services encompasses every aspect of the transaction lifecycle, from initial valuation and market analysis to due diligence, negotiation, and post-merger integration. Through a combination of extensive industry experience, market insights, and unparalleled dedication, Sigma Mergers & Acquisitions delivers exceptional results that drive growth and prosperity for our clients. Whether you are considering selling your business, seeking strategic acquisitions, or exploring other growth opportunities, trust Sigma Mergers & Acquisitions to be your trusted partner every step of the way. Contact us today to discover how we can help you unlock the full potential of your business and achieve your strategic objectives.

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Scot Cockroft Business Broker
Hi, I’m Scot Cockroft.

When I founded Sigma Mergers and Acquisitions back in 2003, I had sold my business the year prior.

Now, that can sound good, but let me tell you, back in 2003, it was not easy to sell a business. Not that I’m saying in modern day times it’s easy to sell a business, but back then I interviewed broker after broker after broker, and no one was interested in actually seeing the value that my business brought to the table.

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Sigma is a the leading business broker in with Corporate offices in Dallas/Fort Worth with roots from 1984. Over 600 businesses sold in Dallas, Fort Worth, Texas, Oklahoma and across the South. Sigma provides full business brokerage services with NO upfront fees. We provide Market approach business valuations for business sales. Sigma is passionate about helping business owners achieve their goal of financial security. Contact us today for a free no obligation business valuation. We are here to help you achieve your goals.

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