Frequently Asked Questions

At Ryco, we pride ourselves on our structured and thorough sale process methodology that we have developed through years of experience and which we tailor to each client’s specific needs and goals. We believe our methodology maximizes our clients’ chances at a successful sale and helps them to achieve the best possible value for their business.  We are also serious about maintaining confidentiality throughout the process, which ensures that your business maintains its competitive advantage and employee loyalty until you are ready to disclose a transaction on your terms. The sale process steps typically include the following:

1. Define Goals and Objectives: Meetings to determine the seller’s objectives so that we tailor our services and focus our efforts to the needs and goals of the seller.
2. Collect Information: Prior to launching a sale process, our advisors will thoroughly analyze company business data and historical financials in order to gain an in-depth understanding of the operation. Proper preparation is crucial for the best presentation of the business to prospective buyers.
3. Valuation: Based on the review of the financials and operation, as well as an evaluation of comparable transactions, we will work with the seller to determine an opinion of value and an appropriate asking price.  An appropriate valuation minimizes the risk of losing a timely sale by overpricing the business, or of leaving money on the table by undervaluing the business.
4. Marketing Material Preparation: We prepare a comprehensive set of marketing materials to share with prospective buyers. It is of the utmost importance that the business be properly packaged with all facts organized and consistently presented. This ensures presentation in the most favorable light while educating buyers and maximizing valuation. During this stage, we also reach out to our network of banks to prequalify business for SBA financing, if applicable.
5. Buyer Identification, Listing and Outbound Marketing: We will determine the most likely type of buyer and best marketing strategy for the business. Our goal is to provide the maximum exposure to qualified buyers while also maintaining confidentiality.
6. Prospective Buyer Screening Process: Ryco thoroughly screens all prospective buyers to ensure that they are qualified and executes confidentiality agreements with any buyer who wishes to receive additional information. We share an initial set of confidential marketing materials with qualified buyers and field all prospective follow-up questions and data requests.
7. Deal Negotiation and Buyer Diligence: We negotiate key deal terms and ensure that they are formalized in a Letter of Intent or Term Sheet. The buyer will usually have a due diligence period in which they verify the accuracy of the information provided by the seller.  We manage the process of ensure that all diligence requests are satisfied. 
8. Deal Execution: We facilitate the necessary steps to ensure that the deal is successfully consummated, including negotiation and working with your transaction attorney on contract drafting. Ryco ensures that all parties at the closing table are working together and keeping focused on timeline. 
9. Post-Closing Transition Period: The seller generally agrees to assist the buyer for a negotiated period of time in order to ensure a seamless transition.

Buying a business can be rewarding and lucrative, but it is also a serious financial and personal commitment that requires a systematic due diligence effort to ensure that you have thoroughly vetted all information provided by the seller and are paying a fair price for the business. All too often, new owners jump blindly into a business purchase without a proper understanding of the business they are acquiring and the cash flow it generates. In many cases, these buyers end up overpaying for the business, which can have a disastrous effect on financial returns.  Ryco can help guide you through the complex process of buying a business. 

Determining the fair market value of a company is an involved process that takes into account many variables.  Among the most important is the cash flow of the business before the owner’s salary and benefits, often called “Seller’s Discretionary Earnings” or “Adjusted EBITDA.” The industry is also an important part of the valuation process, and we can compare the business to similar ones that we’ve either represented in the past or for which we have collected data from a variety of sources.  Lastly, there are a number of other factors that should be considered in valuing the business, including management team, reliance on the current owner, customer concentration, historical growth, margins and future cash flow projections. Ryco Advisors can help you evaluate all relevant factors to ensure that you are paying a fair price and maximizing your return on investment. 

Starting a business from scratch can be a difficult and risky proposition, with the majority of new business start-ups failing within the first three years. Buying an established existing business can be an attractive and lower-risk alternative if executed properly.  Acquiring an established business with a proven track record provides a buyer with many advantages over starting one from scratch, including access to existing infrastructure, a trained employee base, solid cash flows, branding and name recognition and established client relationships.  

Although buying a business can be one of the best investment decisions one can make, buyers must still be diligent about ensuring that they have a thorough understanding of the business operations, market risks and financial performance.  Perhaps most importantly, it is essential to ensure that the purchase price is appropriate in order to optimize financial return on investment.  An experienced business intermediary can help buyers navigate through the complex process and maximize the chances at a successful outcome.