Case Study: Phase Owner Out Plan
By Martin Hansen, CEO – Mavrek
Date: December 2023
Introduction
This case study highlights the story of two sisters, Martha and Mary, the owners of a retail furniture business with twenty-two full-time and five part-time employees. Additionally, this scenario also introduces Mavrek, a platform that assists business owners, future business owners as well as their business advisors (exit planners, CPAs, real estate professionals, business attorneys and wealth managers) with the process of selling, buying, or transferring a business.
The Situation
It was summertime, the sisters decided to sell their business and retire. They spoke with their family looking for a potential heir that would take over the business but there were no takers. Several of their children work within the business yet no one wanted the responsibility of taking over the business. They conducted a store meeting with all the employees and shared their plans as they wanted to be completely transparent. They explained, it was not just their future but their employees as well. After a brief round of applause, the staff overwhelmingly gave their blessing which included general manager, the sale manager, and the head bookkeeper. The following week, the three managers and the sisters met with company’s business advisor to discuss a sale process.
The Business Advisor’s Advice
Their business advisor suggested they take one of two routes; hire a business broker or try the Mavrek software which she had used before. However, after a few days the sisters decided to hire a business broker. They followed the business broker’s advice and after eight months and only two potential buyers that presented ridiculous low-ball offers, therefore they cancelled the broker agreement and again met with their business advisor asking for help. She suggested Mavrek again, and right there in her office they signed up and added her as a “team member” along with their three managers – it took less than five minutes. The business advisor explained the software is simple to use and that they just needed to follow the prompts to complete the business profile section, upload the business documentation requested and the software would provide them with the necessary guidance to get a deal done – just follow the prompts she said. Additionally, she mentioned the software had excellent security, was safe to use and confidential. Thereafter, they just needed to follow the steps to find a buyer and once found, they could invite them to the software and then they would need to just keep following the steps outlined. They left the meeting feeling more confident about finding a buyer and knew their business advisor was involved and assisting weekly.
The Situation – Updated
The sisters and their business advisor completed the business profile in less than thirty minutes. Shortly thereafter they started on step one and began uploading the necessary documents which the business advisor helped them gather and then just simply followed the Mavrek prompts. They listed their business on multiple “Business For Sale” listing sites recommended by Mavrek and in the second month of their buyer search, they were contacted directly by a qualified buyer who expressed interest in the business, and they immediately sent the buyer an invite from the Mavrek software. The buyer onboarded easily and the quickly moved through the other steps – with the assistance of their business advisor, they completed the deal in the 4th quarter.
Lessons Learned
Making it easy to buy the business was critical in this case (all most other deals as well) as Mavrek is an all-in-one software that keeps the buyer and seller connected until the deal is done. Also, CPA’s or other business advisors can be critical to the sale process unless you want to go it alone – which some people on Mavrek do. The sisters now preach two things; 1) always consult your business advisor prior to attempting to sell a business and 2) use Mavrek – it made all the difference. Their business advisor was paid by the hour plus a closing bonus. The sisters calculated based on the failed business broker agreement they saved several hundred thousand dollars in fees by using their business advisor.
The Outcome
The sisters sold the assets and the goodwill of their business, received a sale price within 10% of the valuation they received from their CPA. They needed to remain with the business for three years with each year requiring less time than the year before but salaried for their time. Nevertheless, they are now free of the business, have money in the bank and look forward to full retirement in three years.
A Solution: Mavrek
Mavrek’s goal is to assist the business owner and their business advisor by offering a platform that facilitates the process of selling, buying, or transferring a business. Mavrek provides the necessary deal tools and resources to ensure that business owners and advisors as well as future business owners are well-prepared and confident in their decisions.
Join the millions of business owners and advisors and budding entrepreneurs who will be selling, buying, or transferring businesses in the next 12 months. Visit www.mavrek.com to access the platform.
Conclusion
The case study of Martha and Mary highlight the critical importance of asking for advice from a business advisor (exit planners, CPAs, real estate professionals, business attorneys, and wealth managers). It also serves as a reminder that being ready and maintaining a comprehensive database of important documents within the Mavrek software can make a significant difference when the time comes to consider a sale of a business. With the assistance of the Mavrek software, business owners and their advisors and future business owners can navigate the process of selling, buying, or transferring businesses with confidence.
