When should I start thinking about selling my firm?
Determining when to start the process of selling your firm depends on many factors. If you want to sell to retire, you should start thinking about selling at least 5 years before planned retirement. As an owner or CEO selling your firm, part of its value is you, so you will generally have to commit to 2 - 4 more years of employment after you have transferred ownership.
If you are selling for other reasons, such as growth or service offering expansion, there are numerous factors involved in making the decision of when to sell, who to sell to, and what your terms will be. PSMJ Resources consultants offer fee-based guidance in these areas.
How long will it take me to sell my firm?
It depends on many factors. First, you must find interested buyers. This can sometimes take just a few days/weeks on the market, but it is possible for it to take months, or more. Once you find an interested buyer and they sign a Letter of Intent (LOI), the Due Diligence process can begin. This consists of a buyer sending an extensive list of document requests pertaining to your company, and you/your team compiling a data room. Once due diligence is complete, you and the buyer may close the deal and, if desired, announce the fact that you have joined forces.
What is EBITDA?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation and Amortization.” It is the most common profit metric that drives external market valuation.
What is an LOI?
LOI stands for “Letter of Intent.” This document, also known as a term sheet, is provided by the buyer to formally declare their intent to buy your business. This document can include a rough sketch of what the deal will look like if/when it goes through.
What is a CIM?
CIM stands for “Confidential Information Memorandum.” This document is a marketing package your firm may give to an interested buyer after they have signed the Non-Disclosure Agreement. It provides a closer look at what your firm is all about, highlighting why your firm stands out as a smart buy. It should include information such as your service offerings, location, reason for sale, financial information, and more. AECmatch Premium Users receive a template outlining everything needed to craft a high-quality CIM.
Is the NDA legally binding?
Yes. If the buyer breaches the terms of the signed NDA, the seller can take legal action. AECmatch and PSMJ Resources are not liable for breaches nor will be a party to any legal action arising between buyers and sellers as a result of the use of this site.
What if I receive a non-disclosure agreement from a firm that I don’t want to sell to?
You are under no obligation to disclose your intent to sell to anyone that you don’t want to know. You may simply ignore the request.
What if I can’t sell my firm?
If you are having a difficult time selling your firm, there are several factors that may be to blame. Some may be out of your control, such as the state of the economy, or simply that you haven’t yet crossed paths with a buyer looking for a firm like yours. There are things that may be in your control, though, that can help you attract more interested buyers, such as strong profit margins and a wide variety of service offerings.
What is AECmatch’s role in facilitating the transaction?
AECmatch is solely a platform to connect buyers and sellers. AECmatch does not negotiate on behalf of parties or advise parties on negotiation positions. Buyers and sellers interested in such services should contact Susan LeComte, PSMJ Resources, at 857-255-3205 or [email protected]
How often does AECmatch add new firms for sale?
New firm listings are added immediately upon approval by our team, but the volume depends entirely on when sellers across the United States decide to put their firm on the market. If you have not found any listings that meet your strategic needs, check back regularly as the listings are ever-changing. You can sign up to be automatically alerted when a new firm is added.
I want to sell my firm. Will my employees, clients, and vendors be able to see that I am selling?
Your AECmatch listing is anonymous, and your identity is only revealed to buyers you choose and who sign an NDA. While AECmatch is not liable for your identity being revealed, your privacy is of utmost importance to us. Some steps you should take when creating your anonymous listing:
- Do not copy and paste information about your firm from your website. A quick search of the words in your listing could reveal you as the top result on Google.
- Ensure that your company name and/or employees' names are not included in your listing. Write your listing in the third-person and refer to your firm as “The Company.”
- Do not include client names or notable projects by name. You may describe them, but a quick Google search could reveal the companies involved in the mentioned project and reveal your identity.
As an extra checkpoint of precaution, AECmatch staff will review your listing before it goes live, searching for identifying names, locations, and clients, and give you the opportunity to revise it.
Why should I remain anonymous?
The consequences of revealing your intent to sell can be devastating. If your employees learn that you are looking to sell, they may seek employment elsewhere. If your competitors hear about it, they may poach your clients and/or employees. You and your employees are the true value of your firm, so without them, your firm’s value is significantly compromised.
How do I know how much my firm is worth?
You will want to consider getting your firm valued. AECmatch Premium offers a valuation do-it-yourself tool. If you would like a professional valuation of your firm from experienced PSMJ Resources consultants, please contact Susan LeComte at 857-255-3205 or [email protected]
How do I know how much to sell my firm for?
Once you’ve determined the value of your firm, the potential buyer will factor that price with a “multiple.” Multiples are ever-changing and depend heavily on the buyer’s strategy, the seller’s firm size, the multiples that other similar deals have used, and more.