thinking about ...
Our Proven Process
Since 2008, Focal 5 has perfected a marketing-centric approach to achieve an 80% success rate. While the M&A industry historically only closes about 20% of the deals, Focal 5 has created a 5-step process that effectively eliminates most causes of failure.
5 Steps to Success
3. MARKETING THE SALE
4. DUE DILIGENCE
Whether the buyer is a next generation family member, employee, or an outside buyer, a successful transition plan requires that you understand your future financial needs, your timing, and maybe most importantly, your business value. The Focal Five Group Proprietary Marketability Quotient will answer those questions with the highest degree of certainty. It will identify your business value as it is today, as it could be with a few enhancements, or what it would look like with long-term optimization. The quotient takes into consideration multiple factors, including but not limited to your industry, critical financial performance markers, and your management structure.
Every ownership transaction is a taxable event. Unlike yesteryears when the IRS accepted the recorded value of almost every transaction, today's IRS accords heavy scrutiny to the transfer of almost every business transaction. When selling a business, the IRS focuses on one key component- Fair Market Value. Such a determination generally is secured by using the trained methodologies of an accredited Valuation Analyst. There can be no replacement for the peace of mind brought by a proper Valuation that uses accepted protocols.
4. DUE DILIGENCE
Where the majority of deals fail, after an offer has been made by a Buyer and accepted by a Seller, is when the Buyer performs due diligence. All good buyers want more than a peak behind the curtain- they need to confirm everything that has been represented. This can include, but is not limited to property value, buildings inspections, equipment appraisals, bookkeeping & accounting procedures, employee-related issues, client contracts, and much more. By working with Focal 5 in the initial Discovery and Planning process, prospective Buyers are given factual and verified information, so when Buyers ask questions in Due Diligence, it all checks out. Instead of raising concerns, our process creates confidence for Buyers, which closes the deal in a smooth transition.
In an ideal world, every business owner would plan their exit before they get started. Much like a military operation, multiple contingencies are pre-planned to allow for the safe exit of each participant. The alternative extreme is the business owner who is so identified with his business that he never develops an exit plan and leaves things to chance, typically ending in catastrophic results. Most owners today find themselves somewhere in the middle. While every other transaction is truly unique, one thing is certain - every business owner will leave their business at some point, the question is how.
Two thirds of all business transitions today are sold to outside buyers, individuals, or companies previously unknown to the seller. Should you choose to transition your business to an outside buyer, the overwhelming truth is that competition drives price. Focal Five uses a combination of modern technology and good old fashioned marketing to find as many prospective buyers as possible. After generating sincere interest from a multitude of parties, our negotiators go to work for you to find the best fit for your business.
There should be no surprises in the process of closing a deal. The purchase agreements and transactional documents should be negotiated in advance, then written up to reflect what is fair to all concerned. The most critical factor to do so, is to work with legal advisors that are experienced with drafting and reviewing transactional documents when selling a business. Those agreements should reflect the deal that has been negotiated. Instead of attorneys that are "deal killers", Focal 5 works with "deal makers" that get the deal closed.