American Fortune Mergers

"If you are looking to sell
your business, you owe it
to yourself to read this
report now"

By Brian Mazar, CEO
American Fortune Mergers & Acquisitions, LLC
800-531-2591 www.FortuneBTA.com

Why Do More Than 80% Of Businesses Never Sell?

Sometimes business owners are their own worst enemies when they try to sell a business.

Statistics show that less than twenty percent of businesses sell when they are marketed for sale.
This means that more than eighty percent of businesses never sell.

A survey of merger and acquisition (M&A) advisor(s) and business brokers showed some very
interesting insight. They were asked to identify top issues that were problematic in the ability of a
business to sell successfully. The top response was seller valuation expectations; sixty nine
percent of merger & acquisition advisor(s) and business brokers indicated this issue as being the
most problematic in selling a business.

Starting on the next page are some other reasons why many businesses do not sell.

Maximizing Business Value - Transferring Business Success
800-531-2591 www.fortunebta.com

(502) 244-0480


The Top 10 Key Reasons Why Many Businesses Do Not Sell
1. The valuation of the business is too high, in some cases by as much as 100%.

2. The business has several family members in
top management positions.

3. The owner is the business. The business
cannot effectively run without the efforts and
know-how of the owner.

4. One or two customers constitute more than
25% of the total business.

5. The business' industry is diminishing or
threatened by globalization.

6. The owner(s) is aging and has slowed-down,
resulting in diminishing revenues.

7. The owner did not take time to perform exit
or succession planning. To properly prepare
the business for sale, the owner should have
engaged in exit planning 2-5 years prior to
selling.

8. Many of the financial rewards of the businesses were taken by the owner in various
“perks” which, from a business valuation perspective, will not make it to the EBIDTA as
add backs.

9. The seller did not take time to become educated on the selling process, especially on the
possible ugliness of the due diligence process by the buyer and their advisor.

10. The owner did not utilize the professional services of trusted mergers & acquisitions
advisor or, in the case of a retail company or a small business, the services of a business
broker.

Without properly preparing your business for sale and arming yourself with a proven mergers and
acquisitions process, there will be a huge business valuation gap between what the business seller
expects to receive and what a reasonable buyer sees as fair market price.

American Fortune & Acquisitions, LLC

(502) 244-0480

Selling a business takes years of preparation and the use of a proven process. Additionally, it is
time consuming. A business owner trying to keeps their business running smoothly while, at the
same time, trying to sift through streams of bargain hunters can be daunting. Without a proven
process, a formal business valuation, and a good amount of preparation, these bargain hunters
will chip away at the sellers asking price.

What About B2B and Larger Businesses?
For owners of B2B businesses and large businesses, your buyer will not be an individual, but
rather a corporation or a private equity group. If the potential buyer has revenues up to $100
million, the mergers and acquisitions contact is usually the president.

If the company is larger, the contact is typically the head of strategy, business development or
merger and acquisition services. The first task is to recognize that reaching these corporate buyers
is a very difficult and a labor intensive process. In these situations, it is wise to enlist the services
of a mergers & acquisitions advisor firm that specializes in reaching these targeted buyers.

Summary
In summary, it cannot be stressed enough that there needs to be proper preparation of a business
for sale. The process to properly prepare a business for sale takes approximately 2-5 years, it is
not very costly, and it does not take much time but the results can be phenomenal and will bring
about a much higher business valuation, better terms and a faster sale.


(502) 244-0480


Eight Tips to Sell a Business Successfully

1. Price It Right. A typical mergers and acquisitions
advisor or business broker just can't bring
themselves to tell you that your business is
overpriced. Don't shoot your merger and acquisition
advisors for valuing your business realistically and
don't choose a mergers & acquisitions advisor on
the basis of which one values your business at the
highest price just so that they can get a listing.

The price (valuation) of your business needs to be
realistic. The best way to accomplish this is to have
your business valued by a third party valuation
expert knowledgeable in the science of business
valuations as well as the market forces that shape the business valuation. Businesses that
use a third party business valuation are much more likely to sell at a higher price.

Those who do not use mergers & acquisitions advisor services or a qualified business
broker combined with a third party business valuation service only have a 10% chance of
selling a business at all.

Your tendency will be to overprice your business. Overpricing the business will result in
taking a longer time to sell the business or it may never sell at all.

Additionally, a business that stays on the market for more than 18 months has an
increased chance that employees, competitors, clients and other parties will learn that the
business is listed for sale. Such information in the wrong hands could devastate the health
of any business for sale.

Furthermore, a business listed for sale for too long is often viewed by buyers as shopworn
merchandise by the time it finally sells, if it sells at all. Nothing raises the doubts of a
prospective buyer more than to find out you've been trying to sell your business for a
long time (18 months or longer).

Prior to marketing the business for sale, have a professional business valuation
performed. A credible and defensible business valuation will greatly solidify a true
market value of a business. Depending on the type of a business being valued and the
detail and length of a valuation, the price can be anywhere from $2,000 to $8,500. The
money spent on a good business valuation will more than pay for itself in the end.


(502) 244-0480


2. Fixtures, Equipment & Facility. Business buyers expect that all the equipment be
routinely serviced and in good working condition. Prepare a detailed list of equipment
with model numbers and serial numbers. Buyers may also want to have a third party
inspection as well a formal valuation of the equipment and fixtures.

Businesses with clean financials, good records, clean facility and premises, and quality
and up to date equipment will receive good consideration by buyers. Most buyers will
likely deduct a significant amount from the asking price if one or several areas of the
business is not presentable or poses shortcomings.

3. Have A Good Reason To Exit & Sell A Business. Buyers are always concerned about
the reason for the sale of a business. They are afraid you may be selling a business
because of a declining industry, the effects of globalization, competitor dominance or
some undisclosed fact that may negatively effect and hurt the business in future years.

Buyers want to hear a valid and logical reason for the sale. Without a good reason for a
sale, business buyers may assume the worst and either offer you a lower price (valuation)
or just walk away.

4. Form An Advisory Team. To sell a business
successfully you need to have the right group of
experts. Start by searching for the services of a
credible mergers & acquisitions advisor followed
by an attorney with merger and acquisition
transaction experience.

Your accountant will also need to be involved in
some aspects of the business sale. Your merger
and acquisition advisor will play the most critical role in the sale of your business
therefore, they need to be qualified and experienced with mergers and acquisitions
services, exit planning, business valuation and many other matters so you can achieve a
predictable and successful outcome in the sale of your business.

Today, selling a business is so specialized it becomes imperative to engage the services
of a mergers & acquisition advisor, investment banker or business broker (for retail or
small businesses).

The best attorney or accountant is no substitute for a specialized and knowledgeable
merger and acquisition advisor who is experienced in all areas of selling businesses


(502) 244-0480

including business valuation, tax matters, deal structuring, problem solving and creative
solutions.

5. Prepare A Good Marketing Package. A good and proper marketing package to sell a
business is absolutely critical. Additionally, being prepared to answer questions during
the buyers due diligence process takes extensive preparation.

To anticipate the buyers due diligence, it is best to prepare a detailed offering
memorandum package to present to buyers when marketing your business for sale. In the
age of computers and readily available data and information, buyers can become quite
informed. Business buyers will likely solicit a professional expert in business valuation
services.

The buyers and their experts will challenge you to justify your price and terms of sale
based upon their understanding of normal investment returns and risk factors found in the
open financial markets.

Having a professional business valuation report will go a long way in defending your
price against such challenges. You also have to compete for a prospective buyer's
attention against an ever-increasing number of
sophisticated groups trying to sell other types of
businesses and investments.

6. Target Buyer Prospects. After you have
performed a thorough review and due diligence
and prepared a marketing package (offering
memorandum), you are ready to sell your
business and look for buyers.

You must educate yourself about the types of
buyers that exist in the marketplace. After studying buyers you will have a better idea
which buyer to seek out for your business: a financial buyer, a corporate buyer, a private
buyer or a strategic buyer.

To assure that the buyer is qualified to buy and operate your business, you must learn
how to carefully screen and qualify the buyer. Your mergers & acquisitions advisor or
business broker can set-up a process to target and qualify these prospects. Desire to buy is
not proof of a business buyers’ ability to buy and operate a business successfully.

Be very careful in the review and qualification of buyers. Many buyers do not have the
money, skills or vision to successfully buy and operate a business.


(502) 244-0480


Depending on myriad of factors, it may take 6 months to 2 years to sell a business. It is
critical to keep your marketing efforts confidential except to very qualified prospects.

A qualified mergers and acquisitions advisor will be
aware of all of these issues and will walk you
through the process of selling your business with
successful results.

7. Negotiate Professionally. When you identify an
interested and qualified buyer prospect, plan your
negotiation strategy carefully. Your mergers and
acquisitions advisor will facilitate the process, so
follow their advice.

Remember that your goal is to sell a business and
not beat the buyer at some negotiation game. You and the merger and acquisition advisor
should carefully strategize on all of the negotiation points.

Give in slowly and carefully and always ask for a concession point in exchange from the
buyer and his team of advisors. Have clear goals in mind to sell the business and do not
get hung up on technicalities otherwise you will win the battle but lose the war.

Don't allow yourself to get bogged down in disputes or become emotionally involved
with the buyer.

Don't allow your ego and pride to distract you from satisfying your underlying goal to
sell your business.

You do not need to become friends with the buyer, but understanding their circumstances
and goals will help you negotiate better. Focus the negotiation on things that are common
to you and the buyer.

Spend time brainstorming numerous options with your mergers and acquisitions advisor
and you will likely come up with many solutions before deciding what to do about any
particular problem. Begin by negotiating the easier points and then move to resolving the
more difficult points.

8. Wrap-it-Up Quickly. Even the best buyer prospects can change their minds overnight.
After the buyer prospect makes a commitment to buy your business, get an offer to
purchase in writing and get a good-sized, non-refundable earnest money deposit.


(502) 244-0480


After the offer to purchase agreement is signed begin to negotiate the finer points and
begin the process of drafting a definitive sales agreement along with all of the other
closing documents and prepare to close on the business as soon as possible.

Your business isn't sold until the money is in your hand. Make sure your check clears
before you set plans in motion for investing, spending the money or taking a well
deserved exotic vacation.


(502) 244-0480


How American Fortune’s "How to Sell a Business" Services
Outperform the Function of a Business Broker

YOUR ADVISOR...

...should be experienced and qualified in all of the service aspects of the sale of businesses
including exit planning, business valuation, taxation and other disciplines. Many advisors and
business brokers will tell you they can sell a business but they lack essential knowledge and
experience to produce successful and consistent results.

At American Fortune, we have been excelling in the preparation and sale of businesses in the
USA since 1998. Our advisor team consists of mergers & acquisitions experts with exceptional
credentials and experience in how to successfully sell a business, mergers & acquisitions advisor
services, exit strategy planning services, and business valuation services.

We specialize in working with businesses with revenues ranging from $3 Million to $100 Million

YOUR NEEDS...

...may be broad and American Fortune understands that. That's why we offer comprehensive
services to help our clients meet their short and long-term business planning goals. We provide
the following services:

 Strategic business planning and growth strategies

 Development of business exit and succession strategy planning services

 Business valuation services

 Maximizing and increasing the valuation of businesses

 Selling businesses for the best price and terms

YOUR ADVANTAGE...
...when selecting American Fortune's services will be in the process and the results.


(502) 244-0480

 You will not pay commissions/fees related to the real estate of the business sale

 American Fortune has historically sold businesses at an average of 98% of the valuation
price

 While the national average is below 30%, American Fortune sells over 90% of the
businesses it takes to market

YOUR LOCATION...

...does not matter. American Fortune corporate offices are located in Los Angeles, California and
Louisville, Kentucky. We serve clients nation-wide (USA). We have merger and acquisitions
advisor (s) in Chicago Illinois, Detroit Michigan, Louisville Kentucky, Lexington Kentucky,
Cincinnati Ohio, Dayton Ohio, Columbus Ohio, Cleveland Ohio, Toledo Ohio, Indianapolis
Indiana, Nashville Tennessee, Atlanta Georgia, Tampa Florida, St. Louis Missouri, Kansas City
Kansas, Lexington Kentucky, Denver Colorado, Dallas Texas, Los Angeles California, San Diego
California. If you are located in the USA, we can help you!

Simply put, we outperform the function and services of a business broker. To get started or to
speak with a qualified business advisor, visit www.FortuneBTA.com or call 800-531-2591 now.


(502) 244-0480

American Fortune Mergers

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