Position and transition a sale of a business without rocking the boat and upsetting contracted clients to the point that they pull their contracts.

TVG represented a project-based business, with many future contracted projects totaling 3 million dollars. TVG has just the right experience that the buyer and a seller need for a delicate sales transaction such as this. Both the buyer and the seller are invested in keeping the business clients happy and the client’s only concern is the quality of work they ultimately receive.

TVG used a “business as usual” strategy where the sellers, slowly introduce the buyers to the clients. With this defined and strategic positioning, the clients were assured that the new buyers are in “beneficial partnership” with the sellers.

In approximately 5 months, the business was successfully transitioned from the seller with minimal bumps along the way. The transaction was handled so successfully by TVG that the buyer had no worries of upset clients and the clients developed the trust they needed during the transition, that moving forward with the buyers was never a question.



Because buying a business is a process.

“I want to buy a business, from a retiring owner, that has a strong management team, a 6-figure cashflow, a double-digit profit margin, and a reoccurring revenue stream. Oh yea, and I want to find it within 90 days.”

I hear this all the time from prospective buyers.

This is always my response…

“Guess What? You and thousands other buyers are looking for the same company.”

I am not saying that these opportunities do not exist, however, hey are uncommon.  Spending time and resources searching for this “unicorn” may not be the best option.

In fact, the price will surely be inflated by the bidding wars that result in an opportunity like this!

According to industry statistics, nine out of ten prospective business buyers never complete a transaction. Why? 

The buying process is long and involved, with many steps. One of the first and most important steps is to set realistic expectations for the business you will buy.

Read this article, before you actively start your search.  The author provides invaluable steps to assist buyers in successfully completing the buying process.

The Vant Group is here to help guide you through the steps of buying or selling a business.


Developing a marketing package that tells your story

Do you have all required documents that market the story of your business?  Having a marketing package will ultimately shorten sell time and award the highest sales price. Without documentation, a buyer cannot make an informed decision about a purchase. In preparing for the sale of your business, below is a list you can use to develop a winning marketing package.

  • Interim financial statements

Interim financials show a buyer the up-to-date financial strength of a company since the last corporate year tax return filing. Interim financials are also necessary for lending institutions when trying to obtain financing.

  • Three years of tax returns and income statements

Three years of financial statements paint a picture for the buyer, on the financial stability of a company. A prospective buyer can use financial statements to analyze revenue and expense trends, determining the health and cyclical trends of the business.

  • Current asset list

When assets are a significant part of the equity, a higher sales price is easily justified. Anything above asset value is considered goodwill and is more difficult to justify. An asset list with total fair market values creates a base value for a business. If outside financing is needed for a business transfer, then an itemized list may be required.

  • Asset and Liabilities

Assets and liabilities on a balance sheet can either be transferred with the sale or kept by the seller. A buyer needs to know exactly what assets and liabilities are an educated offer. It is prudent for a seller to identify which leases and notes can be transferred before the negotiating process begins. Not taking this action could cause a deal to collapse. 

  • Facility information

It is necessary for the prospective buyer to know everything about the facility being purchased. Things to know are:

  1. Where is it located?
  2. What are the lease terms?
  3. Is real estate included in the deal?
  4. What is the square footage?

If the business is in a leased facility, it is imperative that a buyer performs due diligence to determine whether the lease terms can be transferred. Awareness of these factors can give the buyer a stronger negotiating position.

  • Employee information

The most valuable asset in addition to FF& E (Furniture, Fixtures and Equipment) are the employees. The following information should be included in the marketing package:

  1. Number of employees
  2. How long each employee has worked for the company?
  3. What is the current pay structure?
  4. How stable is the workforce?
  5. Do the employees know the business is for sale?
  6. Is the owner willing to stay on as an employee?

Employee information, without personal identifying information can be displayed using an organizational chart.

  • Company history

A chronological summary of a business will provide a prospective buyer a road map to a company’s history. A prospective buyer will be able to look at historic financial statements together with the company’s business history to perform an overall analysis. Information to know:

  1. Has a new line been recently added?
  2. Has the business been moved?
  3. When was this business formed?
  4. Is the business run by the original owner?
  5. What has been the marketing program since the company’s beginning?
  • Other information to include:
  1. Reasonable and fair Asking Price
  2. Deal Structure and Financing
  3. Is there SBA financing available?
  4. Marketing Strategies –Will aggressive marketing increase sales?
  5. Reason for selling? – Retirement, divorce or lack of interest?
  6. Industry Trends – How are industry revenues trending as a whole?
  7. Industry Trade Journal – if a buyer lacks industry experience, trade journals are recommended.
  8. Published articles – Has the business been featured in a newspaper article, or trade article?

Three years ago, the purchase of a business went like this.


The buyer submitted an LOI. To motivate the seller during the sales process, a clause was created whereby the seller could earn additional compensation on all new client contracts. At the close of sale, the buyer discovered that the “new” client contracts were bad, the company was inefficient, undercapitalized, and understaffed.


The buyer spent the first two years making good on bad contracts, investing in systems, processes, and human capital. As a result, the financial statements of the first two years were not attractive to any potential buyers.

In year three, the company yielded great results and hit its stride. With two years of subpar performance, followed by an extremely good year, the market was confused on how to view the future projections for the company. Furthermore, the company was 70% project base and 30% recurring revenue.


The Vant Group was engaged to sell this company purchased three years ago by the client. Instead of putting a ceiling on the value, TVG tied a fixed multiple to the last twelve months of cash flow. Since the company was growing each month and the lower months were dropping off, the value of the company increased by three-fold which made financing options limited.

TVG identified a buyer who wanted to gain entry to this space and ultimately closed the deal with non-traditional bank financing.

Knowing when to sell your business is like knowing when the stock market is at its peak.

Each business owner wanting to sell their business, as a separate list of factors- from personal health to the strength of a specific industry, etc. The perfect time to sell is not determined by a date but an understanding of factors that affect business valuation. Generally, an owner works for 1-2 years to implement the identified business valuation factors. Even if all the M&A environmental factors were optimal, if your business is not ready to sell, then you could miss out on a strong selling time.  In this article, the author does an outstanding job answering the question.  The Vant Group is here to help guide you through the steps of buying or selling a business.

What happens when cash flow doesn’t match the work?


The Vant Group was representing husband and wife owners of a residential/commercial paint company.  Like many construction trade-related businesses, our clients had projects that spanned different financial months and fiscal year.  But unlike other project-based businesses, our clients were using the Cash Accounting method.

Our mandate was to find a motivated and qualified buyer so our client could transition to the next venture.  As always, we assisted both sides with the overall process including obtaining an SBA Business Acquisition Loan.

Almost immediately, we were able to find a great buyer and negotiate a favorable Letter Of Intent; and the buyer proceeded with the SBA loan process.  As the bank was in the process of approving the loan application, the paint company closed its first fiscal quarter, so the bank asked the buyer for Q1 financials.

First Quarter results indicated that this year’s cash flow would be significantly lower than the previous year!:

  • Revenue
    • Revenue for January was significantly lower than the previous year.
    • It is normal in a seasonal business like this for the winter months to be softer, but that did not fully account for the change.
  • Expenses
    • Fixed Expenses were on par with any given month in the year.
    • But Variable Expenses, when compared to Revenue, were significantly out of line.
  • The previous year’s cash flow seemed much stronger than the current year-to-date results indicated.
  • This perceived fall-off in performance caused the bank to express doubt in the loan, and the buyer called us in a panic.


Where expert intermediaries add critical value:

  • Transaction and Industry experience
    • Our intermediaries have lived through countless transactions, and are experts in spotting potential deal-killers like this.
    • Construction trade businesses often execute large projects with multiple stages of cash receipts and expense disbursements.
    • Different client companies use different methods for matching these flows to financial periods.
  • What we discovered
    • Near the end of the previous year, our client had landed a large paint project.
    • Their customer made a large down payment to our client, and our client booked it as revenue that year (as would be expected in the Cash Accounting method).
    • As our client began working on the project in January, they started incurring costs. These costs were booked in the current year.
    • So the revenue was in last year, and the costs were in this year!
  • How we responded
    • We conducted a detailed analysis of the large paint job, and other smaller jobs that had the same impact.
    • We gathered documentation including invoices and receipts.
    • We conducted detailed analysis to match the revenue, expenses, and work completed to the appropriate financial period. This showed that the business was still performing strongly.
    • We packaged that analysis in a straightforward document that the buyer could present to the bank, and made ourselves available for follow-up questions.


The loan was approved soon thereafter, and the transaction closed at the agreed price!  Both sides were happy and were glad The Vant Group was there to keep the process moving forward even when a potential “deal killer” arose.

And Distinct Types Of Acquisition Strategies? 

Analyzing your buyer type and buying parameters can aid in focusing on acquisitions suited to your needs and buying capabilities. Knowing your acquisition strategy, allows you to focus on each deal more confidently, concentrating on offerings you are best positioned to acquire.

The Employed Corporate Executive

The most common buyer in a small business acquisition is the corporate executive. An employed corporate executive, as the income stream, to wait for the opportunity to acquire an “ideal” business. The employed corporate executive buyer may slow the buying process by over analyzing the deal, anxious about giving up the security of a corporate position for the uncertainty of being a business owner.

The Displaced Executive

A displaced executive is often the most motivated buyer type; ready to act and quick to meet with intermediaries and sellers. Like the employed executive, the displaced executive tends to overanalyze deals, bogging themselves down with analysis and ratios. Often acquisition opportunities are lost to more sophisticated buyers because of their inexperience.

Former Business Owners

Former business owners represent tough competition for the executive or displaced executive. More experienced and knowing what to analyze, they quickly come to the buying decision and have banking connections for loans and lines of credit. From the intermediary’s perspective, former business owners tend to be choosy, passing up deals because they can, and may not see the value in acquiring an existing business over starting their own.

Buyer Group

Buyer groups come in all shapes and sizes have an advantage of pooling assets, for more working capital, thus enabling larger purchases. Looking for a rate of return on investment, buying groups may want to operate as absentee owners, putting the seller in a good position to stay on as an employee or consultant. Other buying groups bring in their own infrastructure to run the business themselves.

Turnaround Specialist

The turnaround specialist is rare and classified as an experienced consultant focused on large to midmarket underperforming businesses with enough resources to justify his time in transforming them to a profitable status. Turnaround specialist and most intermediaries will not work with small arena companies that have limited operational scope, no customer base, and are in financial trouble.

Individual Buyer

An individual buyer has substantial financial resources and experience in a familiar operation. The individual buyer looks for a financially healthy business that will yield a sound return on the investment of both money and time. In many of these cases, seller financing is an essential element in the acquisition, and in the long run, benefits both parties. The individual buyer will require a strong bottom line when it comes to acquisition price and will usually limit themselves to transactions that are highly leveraged.

The Strategic Buyer

This strategic buyer is most often a company whose long-term plan is to enter new markets, increase market share, gain new technology, or eliminate competition. Strategic buyers look at businesses with sales over $1 million, a proprietary product and/or unique market share, and an effective management that is willing to remain in place.

The Synergistic Buyer

The synergistic buyer, like the strategic type, is usually a company. The Synergistic buyer looks to acquire two companies, that together will produce more or be worth more than they are separately. This acquisition type is successful merging companies, making them more competitive and profitable


The acquisition market can be compared to a rifle range. There are many different shooters at any one time, but they are concentrated on their own targets. The more knowledgeable buyers are about their competition, the better focused they are on their own target

At the end of the day, the biggest failure in business is not having the proper policies and procedures in place.

Operating a business without proper policies and procedures would be like going out into the wild, wild west without any instructions.    The startup costs may be less than an acquisition, the cost of not having a business model or infrastructure is a cost not often factored into the cost of starting a business.  When you calculate all costs, it’s less expensive and less risky to buy a business than it is to start your own business.

The Vant Group is here to help guide you through the steps of buying or selling a business. Here’s a great article we would love to share.



Challenge:  Close the buyer deal in 5 weeks from the receipt of Letter of Intent.

Buyer and his wife had 3 kids and were living in Houston.  The buyer was currently employed and looking to purchase a business in Dallas.  He and his wife had found a business in Dallas, and were preparing to move to Dallas before the beginning of the school year and start their new business.  As they were negotiating the deal, they learned about the business we had for sell through a personal connection with our firm.  At first, they were reluctant to look at our deal as they had already made their minds up about their current target acquisition.  The business TVG had for sale was the same type of business they were trying to purchase.  He conceded to look at the business TVG had for sale and decided quickly that this was a better deal for him and his family. It was in a better location, more cash flow, and served an upscale clientele that he was hoping to have.  He and his wife flew that weekend to tour the location and meet the business owners.  He quickly informed us that he would be submitting a Letter of Intent.  The closing date in the LOI was scheduled to transpire in just 5 weeks.


  1. The marketing package was so comprehensive that the Due Diligence item request was manageable. Most of the significant questions had been disclosed prior to the LOI.  The Due Diligence items requested were more of a matter of items needed to make the transition smooth and they were delivered in a timely manner to the Buyer.
  2. The deal had already been pre-approved by an SBA preferred lender. The SBA department of this bank was experienced and nimble.  The bank was ready to make the deal happen as soon as TVG could introduce to them a qualified buyer.  The buyer had the financial strength and the perfect background for the business acquisition.  The banker had no problem approving the buyer.
  3. Both the Seller and Buyer were extremely motived to get the deal done. Each side responded quickly to the questions and requests.  The negotiating was done carefully yet swiftly.
  4. The Seller was most accommodating to the Buyer. It is not uncommon for a Buyer to get very nervous about the decision they are making and the debt they are incurring.  As we got closer to the closing table, the Buyer was juggling the packing of their home, quitting a job, closing on the purchase of a new home in Dallas, and getting their kids registered for school.  The Buyer at times would be stressed and nervous and we worked to accommodate their requests and keep all the moving parts moving on track.


As we all sat around the table at the Escrow Agents office, the Escrow attorney said she had to double check the date of the LOI.  She thought it had read the prior year, and not the current year.  She thought it couldn’t have been dated this year as it was only about one month ago.  She doubled checked and certainly, the LOI was dated only a month earlier.  She said she had never seen a deal go from LOI to close in one month.  With the extensive preparation done before the business was put on the market, the comprehensive information shared in the marketing package, the experienced SBA preferred lender, the motivated Buyer, and Seller, we did, indeed, close in just 5 weeks.

Timing In Selling a Business is Everything 

A business owner can spend his entire career developing a business until it becomes his “baby.” Selling can be the most difficult and emotional decision a business owner will ever make. It is filled with emotions similar to sending a child off to college or giving a daughter away at her wedding. The timing and reasoning for selling must be right. The reason for selling will also be a paramount issue for a prospective buyer. Fortunately, the best time to sell can be determined by 8 factors.

1.  Burnout / Boredom

If you have lost your passion for the business, dislike to go to the office, and cannot wait to leave, then you should re-read this book and begin formulating an exit plan. As burnout and boredom are the most common reasons for an owner selling his business.

2.  Retirement (age)

At some point in life, the time comes to reap the benefits of years of hard work. This is another common reason for sale in the industry. From a buyer’s perspective, this is the most justifiable reason for sale, which creates a comfort level when analyzing a business.If the owner does not have a family member to pass the business to, he is faced with the prospect of selling. Listing retirement at age 40 is not an acceptable reason to sell for most buyers. Conversely, a business owner retiring at age 50+ who has been in the business most of his life is an excellent reason for selling from a buyer’s perspective.

3.  Health 

Health is a very unfortunate reason for selling since it is usually out of the control of a business owner. Often, the sale must be quick because of a decline in sales and a void of top decision making due to less time being spent at the business by the owner. Structuring a deal for a quick sale due to the owner’s health does not have to be for a lower price. A seller can set up a low-down payment and longer owner note which will keep the sale price at the highest justifiable level, while getting the owner out quickly. You should be leery of potential buyers that attempt to get a bargain, because of a seller’s vulnerable position. 

4.  Economic factors

In addition to being ready to sell and having a solidly profitable business, the economic marketplace must have its “stars” aligned in order for it to be a good time to sell. An ideal scenario to sell is when there is a strong economic environment of low-interest rates, a growing stock market, a strong dollar, low inflation, low taxes, and a solid availability of capital. It is always a good idea to keep up with economic trends. While a bad economic setting does not help a sale, a good, profitable business will sell under most economic conditions: good or bad.

5. Lack of operating capital / Need for growth capital

If it were not for capital concerns, many business owners might never sell. There comes a point when the continued worry of funding accounts receivable, payroll, or the rent will push a business owner over the edge.  You say to yourself, “If I just had some more capital I could do X, Y and Z and double the business.” This is like burnout and many times the business will flatten out due to a lack of motivation. The salability will suffer as well as the sale price.

6. Industry overview

To know the future of an industry. If the industry is heading in a bad direction, it is wise to evaluate the options. It would be unwise to suggest that every time an industry dip or change occurs that an owner should think about selling, but a management style that has proven successful in one climate may be challenged in another. The most common response is “I can’t do anything about it, so why worry?” The more aware an owner is of upcoming changes in his industry, the more prepared he will be in evaluating his options. Informed sellers regularly attend local Chamber of Commerce meetings, annual industry conventions, read trade publications.  

7. Employee stability

Employees are most company’s key assets, so make sure to have a solid team in place before you begin marketing your business. It does not matter significantly if a low-level employee is lost, but once you lose a key salesperson or operation manager you will start raising eyebrows during marketing.  Nothing scares off good buyers more than key employees recently departing to the ranks of the competition. If selling is a near option it is a good idea to firm up relationships with key employees. 

8. Sales / Cash flow

“Cash flow is everything.” The main scenarios when cash flow is not “everything” is when the assets are the only value of the company or if a competitor is just looking at your clientele. When analyzing a business, prospective buyers and lenders key in on even the slightest slip in annual revenue and cash flow. Even an annual dip as small as 2% will cause a buyer and lender to start wondering if there are significant problems in the business. We have sold businesses with drop-in sales in two and three consecutive years, but the final negotiated sale price suffered as a result.