EXCLUSIVELY . . .

PREMIER’S
8-STEPS TO A SUCCESSFUL SALE

Step 1: Learn about the business and recommend a price and deal structure at no cost or obligation to the business owner who is considering selling his or her business.

The most important factor in determining the price for a lower middle market business is cash flow. Depending on the size of the business, cash flow is determined in three different ways:

1. EBIT ~ Earnings + Interest + Taxes
2. EBITDA ~ Earnings+Interest + Taxes + Depreciation + Amortization
3. EBITDAS ~ Earnings + Interest + Taxes + Depreciation + Amortization + Owner Salary ( including all perks )

Other factors we consider include:

• Industry trends
• Balance sheet and profit & loss statement trends
• How other companies of similar size in the industry perform
• Gross margins
• “Barriers to entry” (the difficulty of someone getting into the business)
• Types of products/services offered
• Competition
• Customer base
• Type and condition of equipment and facility appearance
• Quality of the staff
• The state of the economy and the lower middle business market
• Growth opportunities for the company
• Owner’s role
• Owner’s financial needs and goals

Upon receiving the recommendation based on this information, a business owner may decide not to proceed with Premier. There is no obligation or cost to the owner.

Step 2: Implement comprehensive procedures for maintaining the confidentiality of the process.

Step 3: Research the industry.

Step 4: Prepare non-confidential “teaser” material and a non-confidential executive profile.

Step 5: Prepare a highly confidential full profile for qualified buyer prospects. This bound document provides a comprehensive look at most aspects of the business. A business owner may choose to require his/her prior, personal approval on each prospect receiving this document.

Step 6: Contact four types of buyer prospects including:

• Strategic buyers (when appropriate)-these are companies in the industry or a related industry who would benefit by the purchase.
• Private investors/individual buyers-Premier has thousands of these prospects in our active database.
• Financial groups (investment groups that own multiple companies)-Premier has numerous financial groups in our active database. . .some of whom operate in other countries.
• Other prospects-those persons who read our ads, visit our web site, receive our mailings, attend our seminars, and read our articles.

Step 7: Qualify interested prospects, “evidence of financial capability is required”.

Step 8: Visit the facilities with the prospective buyer. These eight steps normally take an average of six months. The owner’s time commitment is usually quite limited during this process.

NEXT. . .

6 STEPS TO CLOSE A DEAL

Step 1: Buyer gives seller an offer in the form of a non-binding letter of intent that covers only the major points of the deal.

Step 2: Seller probably makes a counter offer to this letter of intent.

Step 3: Buyer accepts counter, and business is taken off the market.

Step 4: Normally, a buyer now puts some money in escrow.

Step 5: The due diligence process begins. This is the point in the process where the buyer investigates the seller and visa versa. Using a highly experienced broker who actively quarterbacks the due diligence process can greatly reduce the risk of a deal falling apart.

Step 6: A closing takes place. This process typically takes 60 days. The owner’s time commitment during this process is quite heavy.