Sell My Wholesale Distribution Company

If you are a lower-middle-market wholesale distribution business owner in California and have decided to sell your wholesale distribution company, we have identified five tips to get you started.

How to Sell My Wholesale Distribution Company

Selling a wholesale distribution company is not as easy as selling a piece of furniture. It requires adequate planning and getting help from an intermediary, preferably a professional M&A Advisor.

An M&A broker will assist you from the beginning to the end of the process.

Wholesale distribution company owners tend to face several challenges when they attempt to sell their companies by themselves. Most times, the owners don’t know how to value a distribution business; hence, calculating the distribution business’ worth becomes a challenge.

With the help of an expert, the process becomes more straightforward. The top 5 reasons why a business owner may decide to sell a distribution company includes:

• Retirement
• Relocation
• Low revenue
• Death of the original owner of the business
• Partner problems

How to Increase your Wholesale Distribution Business Value

It is a bad idea to make drastic changes to your business at the last minute when you decide to sell your company. Instead, you should properly plan and prepare for the business exit and transition ownership.

Firstly, you need to seek advice from experienced advisors on possible ways to boost the company's profits to attract more potential buyers. To increase your company's profit, you must work closely with the business advisor to develop a strategy to boost your sales and reduce expenses.

You can explore new markets and offer new services or products to boost your sales. Do not assume that it is okay to stop investing in the business because you've decided to sell. Once you stop investing in equipment and strategies that'll improve your business, its values begin to drop, and you'll get fewer potential buyers.

While investing in your business, do not forget to train your staff and encourage them to create repeatable and teachable processes. It may be challenging to find a buyer for your business if it cannot function properly without you.

Sell My Wholesale Distribution Company in 5 Steps

So, how can I sell my wholesale distribution company in California? If you've decided to sell your distribution company, there are five critical steps to follow for the process to go smoothly.

1.  Step One: Evaluate Your Company

The first step you must take when selling a distribution business is to determine your company's worth. We recommend that you hire a professional valuation service, so you don’t have to figure out how to value a wholesale business on your own.

Professional valuation companies are experts in evaluating and selling businesses. They have an excellent understanding of how many people in your industry sold their companies in the past. They can also help you to analyze, organize, and present your company’s financial statement to potential buyers in the best way possible.

Evaluating your business’ worth is more straightforward if you properly monitor its asset, monthly or yearly revenue, and potentials. Without first assessing your company's worth, you're unlikely to find a reputable buyer.

2.  Step Two: Make a Summary of your Company’s Operations

One thing a buyer considers when buying a business is how the wholesale distribution business works. As a business owner who's ready to sell the company, you should summarize how you operate the business. Do not state too much in the summary, but do not withhold important information either.

If you reveal too much information and the transaction falls through, you risk damaging your firm and all the effort and investment you’ve put into it.

3.  Step Three: Get Your Legal Documents in Order

Before successfully selling a lower middle market distribution company in California, you need to organize all the applicable legal documents, including licenses and permits. Any serious buyer will demand to see all the legal backings that the company has acquired while under your ownership.

Some of the essential documents you need to provide when selling your business include financial reports clearly stating the company's potential revenue, future planning, and other details that may give insight into the company's potential growth.

4.  Market and List Your Distribution Business For Sale

With all the essential documents ready, it’s time for the next step in the selling process, listing or marketing your company to potential  buyers. A strategy you can borrow from M&A wholesalers is to present the company with the summary you prepared, stating significant benefits the potential buyers stand to gain.

However, be careful not to expose too much about your company as this may put your business at risk from competitors, which may negatively impact the business. Do not include details such as company websites, awards for service levels, or media recognition when listing your business for sale.

5.  Allow Your Buyers to Assess the Business Carefully

It is okay to allow your buyers to assess the company's operation after all the concerned parties have negotiated and agreed on an offer when selling your distribution company. Usually, it helps if you give the buyers time to finalize their decision.

Some buyers might also need some time to get money from third parties to fund the transaction.

Merger and Acquisition Advisory Services

If you've chosen to work with an M&A advisory company, you must understand what they do and how they can help you sell your California distribution company. First, let's start with what they do.

An M&A advisory company gives clients advice when they attempt to buy or sell a business or enter a corporate restructuring or financing event. In other words, they serve as middlemen buyers and sellers in a business sale transaction. Aside from that, M&A companies help their customers with mergers and acquisition issues, including equity financing and debt.

During the sale of a business, here are the top three services you can expect from an M&A advisory company:

• They help the business owners calculate the company’s value
• M&A firms leverage the best possible price for the seller
• They also match the sellers to list and market the business with potential qualified strategic buyers

Recap Summary

California business owners in the lower middle market may decide to sell their distribution companies for various reasons, including retirement, change in aspirations, etc. Whatever your reason for selling, you must hire a reputable lower middle-market M&A firm to assist you through the process.

Such firms will help you value your business accurately, and you'll receive the best value for the company. It is also crucial that you carefully summarize how the company works and prepare your legal documents and staff for success in the selling process.

Conclusion

When you sell your business successfully, you're likely to be taxed on the profit you made from selling the business. Therefore, it's essential to seek professional advice from a California lower middle-market M&A advisory firm on reducing the amount of tax you’ll pay.

Hiring an M&A advisory firm also increases your chances of selling the distribution business successfully.

If you are a retiring business owner looking to exit your lower middle market distribution company in California, here are six tips to get you started:

1. Don't wait until the last minute to start planning your exit. The process of selling a lower middle market wholesale distribution business can take a long time, so it's important to start early.

2. Have a clear idea of what you want to get out of the sale. Know your goals and what you're willing to negotiate.

3.  Know what's your company's worth. This is an essential step to take when planning to sell your distribution business in California.

4. Choose the right type of buyer. Not all buyers are created equal, so do your research and find the right one for your business.

5. Be prepared for a lot of due diligence. M&A buy-side due diligence is when buyers will want to know everything about your business, so be ready to provide documentation and answer questions.

6. Be flexible with the terms and conditions of the deal. It's important to be open to  negotiation to get the best possible deal for your business.

Rogerson Business Services, also known as, California's lower middle market business broker is a sell-side M&A advisory firm that has closed hundreds of lower middle-market deals in California. We are dedicated to helping our clients maximize value and achieve their desired outcomes. 

We have a deep understanding of the Californian market and an extensive network of buyers, which allows us to get the best possible price for our clients. We also provide comprehensive support throughout the entire process, from initial valuation to post-closing integration. 

Our hands-on approach and commitment to our client's success set us apart from other firms in the industry. If you consider selling your lower middle market distribution business, we would be honored to help you navigate the process and realize your goals.

If you have decided to value and then sell your lower middle market wholesale distribution company or still not ready, get started here, or call toll-free 1-844-414-9600 and leave a voice message with your question and get it answered within 24 hours. The deal team is spearheaded by Andrew Rogerson, Certified M&A Advisor, he will personally review and understand your pain point/s and prioritize your inquiry with Rogerson Business Services, RBS Advisor

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More Tips to Help Sell a Lower Middle Market Distribution Company