By Martin Hansen, CEO – Mavrek
Date: May 2023
James got the bad news when he was 58. He had a condition that would only worsen and soon would debilitate him – he needed to sale his agriculture service business. He started the business 36 years ago; the same year he married his high school sweetheart.
James, his wife, and the general manager of the business met with their business advisor to discuss how to best sell their business. The business advisor stated he had no real idea, other than putting it on a “business for sale” type website. James asked what information a buyer would ask for and his business advisor stated he would probably need financial statements, tax returns and list of assets and customers. The business advisor reminded James that he only does their taxes so does not access to any of the other information mentioned. As they all left the office, the business advisor also mentioned they would also need proof of all of your income from the business.
They left the meeting defeated, worried after realizing their business was not ready to be sold. James remembered the many times he attended conferences and other small business events that preached “Don’t wait until you have to sell because by then – it may be too late!”. He also recalled hearing several times it takes time and planning to get a business properly prepared for sale as well as remembering hearing an exit planner state “frankly, your business should be ready to sale at any time – it’s just good business regardless – get on Mavrek and get ready”.
Epilogue:
James and his wife closed their business six months later and liquidated the remaining assets in an auction and James passed away three months later. Just prior to his prognoses, the company was at $8.7M in annual sales with an annual growth rate of 6% and an annual NBT of ~10%. The company had zero debt and $769K in A/R and $122K in A/P.
The family ordeal ended with the final tally of $855K before tax. Arguably, the company had a market value of at least three times (3X) the liquidation value as a going concern so quite possibly they left well over a million dollars on the “table”. However, the family found dealing with James’ terminal illness along with having to put all the necessary documentation together was just overwhelming.
This can be avoided with the Mavrek software – small business owners and entrepreneurs deserve a chance to feel confident about selling, buying, or transferring a small business and now every business advisor (exit planner, CPA, real estate professional, business attorney, or wealth manager) can assist their clients with Mavrek.
Join the millions that will sell, buy, or transfer a small business in the next 12 months – be ready with www.marvek.com!
