The decision to sell your business may be the most important decision of your life! Your business is a large part of your personal net worth. You've put energy, effort and sacrifice into it and now it's time to reap the reward and turn the value of your business into cash. But without professional help you face experienced buyers who buy two or more businesses a year. You face demanding and complex procedures, inevitable pitfalls and other costly dangers and you could face them alone.

But there is a solution, a group of dedicated professionals who prepare your business for a successful sale, then strategically guide the complex sale process to a profitable conclusion. LSH are a group of professionals who are merger and acquisition specialists, financial advisors, business sales specialists, and dealmakers for the past eighteen years.

Each year thousands of unwary business owners settle for a price that is based on some formula never realizing that their companies have a clear and definable value, and that their business may be worth more to the right buyer. At LSH we have developed a process that consistently sells more businesses, frequently for more money than even the business owner envisioned. Then why would someone want to sell a successful business? For most its a feeling of boredom, burned out with the day to day routine of their business demands. For others, its a constant struggle to raise operating or growth capital, and sometimes its an attractive sale proposal that persuades an owner to even consider selling. Regardless of the reason for wanting to sell your company, once you've begun the selling process there are certain steps that everyone has to go through, that is.. if you want top dollar. Almost anyone can sell a business and we've found that 3 out of 4 business owners leave dollars on the table. Very few can sell their businesses for top dollar value.

One of the keys to success is positioning your business before you begin to sell. You have to make its financial structure and growth potential look as attractive as possible to buyers. You have to see the sale from the buyers eyes. In essence, you have to determine the true value of your business or you'll never be able to know if an offer is high or low. The fact is, that most business owners are unaware of the true value of their business.

From a buyers point of view, objective documentation of value is essential. Most important, the buyer is buying the future, the businesses growth potential, consistent cash flow and dividend paying capacity. In other words, the buyer is looking for the all important ROI (return on investment). Market research is the key. It's far to complicated and far to difficult to do it yourself. To begin with, you have an emotional involvement in the business that either you value it to high or you value it to low because you've been struggling to keep it alive.

The entire process at LSH begins with a visit to your location. The role of LSH is to determine the true marketability of your business as well as its business dynamics. We will visit you, but please know up front that we only represent one of every four businesses that we visit and speak too. It doesn't mean that your business isn't marketable, it means that your not marketable by LSH.

Quality evaluations are made up of several components:

• Recast Financials
• Market Research
• Pro Forma Financials
• Strengths and Weaknesses
• Deal Structuring
• Value/ROl for the Buyer.

The quality evaluation can take from 20 to 45 days to complete. We probe into your business, your competitors, as well as your market. Our valuation is for your eyes only. It includes an analysis of every aspect of your business both pros and cons. We don't pull any punches. It allows you to see the problems that might discourage potential buyers, and you'll know what to change before we go to market.

Buyers are less concerned with the history of your business than they are in its future and the potential profit it can make for them. They're buying ROI. At LSH we use sophisticated accounting, tax and growth procedures to recast your company's financial statements and market research to determine your future value.

Often recasting substantially increases the apparent earnings of businesses, which makes them more attractive to potential buyers. Recasting is an acceptable general accounting practice. After recasting a company's financial record, LSH uses the record to build a projection of the businesses growth potential; a proforma.

Packaging comes next. We will suggest changes that will make the business' appearance as attractive as possible to potential buyers. We have up to the moment detailed information on every aspect of business statistics and buyer data which is being consistently updated to help us sell your business for top dollar. We consistently check and double check our figures because the information and formulas applied to your business have to be absolutely correct and accurate. If they're not, they won't be credible to the buyer.

The final step in the evaluation process is deciding on an appropriate deal structure. A deal structure includes future personal needs as well as specific rewards. An optimum deal structure is much more than a cash transaction. Once the evaluation is completed, the preliminaries are over, its time to actually sell your business. That's where an LSH dealmaker comes into the picture.

Our dealmakers are experts who are studied in all the complex problems associated with negotiating a sale. A dealmaker is critical to the selling of a business. First, he is experienced, he understands the business of business. He's gone through the process many times and he knows what to expect and what pitfalls to avoid. Secondly, he is impartial, he won't let his emotions compromise the value of the deal. A dealmaker has to understand the buyer, and what the buyer is looking for. He must also understand and be very cognizant of the seller and what he is looking for. His most important job is to protect the seller and be aware of all of the technical workings of the deal, and of the possible traps to watch out for. A successful dealmaker has to understand the entire buy/sell process because he carries the ball and makes the deal happen.

From the evaluation report we prepare a confidential detailed review. It's a detailed guide for qualified buyers, who will have at their fingertips objective information on the value of your company and documentation of its future value. It's essential that all of the information In this report be accurate otherwise an owner may risk legal entanglement. The business review should be entirely confidential, in fact your company name will not appear on the document. This is to protect you from competitors and premature rumors of sale. A shorter version of the business review, a 2 to 3 page business profile is also created and it is sent out to potential buyers.

Selling your business is a process, and it is important that the entire process be fully understood and carefully completed at every stage. We handle the entire process, we are a friend when you need us but not there to bother you while you conduct business. We take the burden and pressure of selling while you maintain the positive picture that would be attractive to buyers.

There are three (3) main steps in selling any business. Prospecting, negotiating and closing. For instance, in prospecting one must first determine the largest number of qualified buyers who would be interested in buying your business. Secondly, knowing who within a given company is the proper contact person and decision maker. It is also very important to know a company's buying history, how do they put deals together and how they act after the deal is over. In dealing with buyers from other countries, knowing the key contact person can save us endless time and effort.

From our database of buyers comes a great deal of other relevant information. From the databases which resides in our business information center (and from online databases), we are able to access nationally a list of 100 - 350 potential buyers for every business we sell. We remain aware of our buyer acquisition, a key contact person and companies. The universe is so much bigger than you think when you go out to sell your business and it is unlikely that you could ever envision who the buyer of your company will be. The methodology we use at LSH is broad enough to generate interest from a series of people that you probably wouldn't have thought of contacting.

After a group of potential buyers has been prospected, the negotiations process begins. Negotiating is the process whereby you learn the needs of the buyer and any objections to you, the seller. It sounds simple, but it could be a time consuming task (4 - 12 months). We serve an important role as a mediator. We work with both sides to make sure all information and needs are understood and properly transmitted.

Negotiations are tough, selling a single business can take as much as 200 - 500 hours, and you could be up against professional buyers who buy businesses for a living. This could put a first time seller at a marked disadvantage. We will discuss all aspects and strategy with you, and implement a solution for a mutual advantage.

There are many sophisticated techniques which may be utilized to obtain top dollar value for your company. One could be a silent auction system that pits groups of three or more buyers against one another. We never mention a price. He who mentions a price first either sets a ceiling or a floor. That could only hurt us. Instead, we let the buyer mention a price. If there's more than one buyer bidding for the business, you are more likely to get a higher offer. We keep several buyers "hot" all of the time, which puts us in control and which in turn helps you arrive at a very successful sale.

Even after the negotiations are over, the sale is still not assured. Due diligence is a very big part of closing the deal. It is a process whereby the buyer brings in his team of experts; financial, legal, and technical to substantiate the representations and information provided to them. If material discrepancies are found, it could put the entire deal in jeopardy.

The most important thing we do as dealmakers, is to completely understand the sellers objectives and help you complete a deal that will satisfy your objectives - and of course bring you a very large check in the process.

We carefully prepare an evaluation, we create a confidential business review, we prospect for potential buyers, you enter Into a negotiation, receive a letter of intent, and survive the all important due diligence process. What is left is the reward. It's the big check for all of your efforts, your business is sold and you carry on with your plans.

To sum up: we're often asked what are the seller's feelings after the sale is completed. There are three primary feelings - First: numbness; this is the result of many hundreds of hours of necessary meetings. It's sort of like watching a gnat giving birth to an elephant. You begin to wonder when it's going to happen, and when it does, there's a sense of numbness - a sense that it's finally over and done. Which leads to the second feeling, which is fear. We have seen the fear on hundreds of faces and it's simply that when one is handed a check for several hundreds of thousands or even millions of dollars, and it's completely liquid (a cashiers check), the fear is, what to do next. The third is a feeling of guilt. It is tied to our backgrounds, "..do I deserve it?.." and we would say to those sellers who knew the right time to act, and to those who did act.. you deserve it! We believe there is a time to come and a time to go, and it's a wise business owner who knows the difference.

Also, a wise man knows to sell sooner rather than later. Bulls make money, bears make money, only pigs get sent to the slaughterhouse. As we look to the future and try to understand the economies we are facing, is it likely that taxes will be reduced or that congress will be infected with a severe case of frugality? We would logically say no, for we don't see it happening. We see taxes increasing and we see the amount of money you leaving on the table increasing. Therefore, we see it to be a case of timing, and the time is to do it now. It was once said, "the pronoun Executive, is derived from the adverb To Execute.. To take Action.. To move Forward." We strongly believe the time to sell is when the deal makes sense, to the seller and the buyer.

Nothing happens unless you make it happen. The most wonderful thing to make happen is personal freedom and the comfort of being able to give to those we love and to do the things we wish.

To define LSH in a single word would be "professional." Those who do all things with a great deal of enthusiasm and skill which carries an implication of commitment. That is our business, and that is our only business - and it is a positive joy to make It happen for the entrepreneur.

Selling a business is a very specialized skill, like being a doctor, you can't use trial and error techniques to learn the ropes. You only have one chance to sell your business, and it means you only have one chance to get it right. You are talking about 70% - 80% of your net worth, and that's a considerable responsibility. That's probably how much you have tied up in your business. So when you sit down at the negotiating table make sure that every possible advantage is on your side. "LSH" is one of those advantages.

Lee, Sperling, Hisamune
550 North Brand Boulevard, suite 525
Glendale, California 91203
Phone: (818) 507-6645 - Fax: (818) 507-7891
Email: lsh@leesperling.com