Thinking about buying another agency or selling your own? If so, Innovative Travel Acquisitions, Inc. is offering 20 tips for buyers and sellers that can make a big difference. Travel Acquisitions, who has handled 538 transactions since it founding in 1991, reported a strong first quarter, including the sales of two companies: Bermuda-based C Travel, the island’s largest travel company that caters to the affluent clients, and Travel Forum, a meetings business with 14 employees with offices in New Jersey and Florida.
“If you want to give yourself the greatest odds of feeling confident and satisfied at the end of an acquisition, we advise that sellers follow these useful tips,” Bob Sweeney, president and CEO said
10 Things Sellers Should Not Do:
• Argue about non-competes.
• Sign long-term lease, or phone contracts, or buy new equipment.
• Call buyer’s directly or attempt to do it yourself.
• Give up client list prior to closing.
• Enter into a negotiation if you are not 100 percent ready to let go of ownership.
• Sign on any transaction that involves no cash at closing.
• Delay negotiations and put off buyer.
• Become emotional during negotiations.
• Tell anyone about your intention to sell too early in the process.
• Ask a price that is not reality based.
10 Things Sellers Should Do:
• Be open-minded if approached, and consult an industry specific expert.
• Get non-disclosure and confidentiality agreement signed.
• Go away if you get a funny feeling about the buyer. It will only magnify going forward.
• Get employees to sign employment contracts.
• Clean up any accounts receivables, buyers do not want to chase money.
• Have 24 months of CPA reviewed financials available.
• List in detail all non-recurring personal expenses you’re running through the business – meals, subscriptions, auto, cell phones, etc.
• Have a flow chart detailing business structure and operations.
• Have a policies and procedures manual.
• Make it smooth for buyer by having organized books & records.
Doug Haugen, senior consultant for Innovative Travel Acquisitions noted that selling your business doesn’t need to be complicated or frustrating, but urges agency owners to use a professional to not only discover the best buyers, but also to help with negotiations. “For many, this will be the largest business/financial transaction other than the purchase or sale of your home. So, why not utilize a professional to help you see around the corner?”
He also urged owners not to postpone making the decision to sell. “Many keep putting it off thinking things will get better and perhaps they can survive or get more for their business if they just hold on for a little longer. Sadly, when I contact them for a follow up, a big majority have lost ground. There is no harm in starting the process now if you really are ready. It’s better to sell when things are starting to pick up versus a slow, and prolonged down turn. Finding the right buyer can take some time, so I always recommend starting the process sooner than later,” Haugen said.