Selling Your Business
Important Considerations You May Want to Discuss
This website is dedicated to helping owners who are considering selling or who may already be in negotiations to sell. You may contact me directly by phone or email for a free consultation. I do not share my email addresses and any conversation with me is considered strictly confidential.
1. Why am I selling?
Understanding your true motivation for selling is the foundation of the entire process. Whether it's retirement, health, partnership disputes, or simply the right time financially, your reason will shape how you approach buyers, structure the deal, and communicate with employees and customers.
2. Is this a good time to sell?
Timing matters enormously in M&A. Market conditions, industry consolidation trends, your company's recent financial performance, and the availability of qualified buyers all influence whether now is the right moment — or whether waiting could yield a significantly better outcome.
3. What are some alternatives to an outright sale?
A full sale isn't the only option. Partial sales, management buyouts, employee stock ownership plans (ESOPs), recapitalizations, and strategic partnerships can all achieve your goals while preserving more control or legacy. It's worth understanding the full range before committing to a path.
4. What's the role of a middle man or broker, their fees, and do I need one?
An experienced M&A advisor brings buyer relationships, deal structure expertise, and negotiating leverage that most owners don't have on their own. Fees vary — typically a retainer plus a success fee based on transaction value. Whether you need one depends on your experience, the complexity of your business, and how many qualified buyers you can realistically access.
5. How do I put a value on my company?
Valuation in the building materials and LBM industry is typically based on a multiple of EBITDA, adjusted for real estate, inventory, receivables, and owner-specific expenses. Strategic buyers may pay more than financial buyers. Understanding how buyers will look at your numbers — not just how you look at them — is critical.
6. Who are the major buyers in my industry?
The building materials and LBM space has a well-defined universe of active acquirers — national chains, regional consolidators, private equity-backed platforms, and strategic independents. Knowing who is actively buying, what they're paying, and what they're looking for gives you a significant advantage before you ever make contact.
7. Should I approach them myself?
Approaching buyers directly without preparation or representation can cost you leverage, confidentiality, and ultimately price. In most cases, a structured process — even an informal one — produces better outcomes than a single direct conversation that starts before you're ready.
8. How do I ensure confidentiality?
Confidentiality is the single most important concern for most sellers. Employees, customers, suppliers, and competitors can all be affected by premature disclosure. Proper NDAs, controlled information release, and careful buyer vetting are essential from the very first conversation.
9. What and when do I tell my employees and customers?
Timing and messaging around disclosure to employees and customers is one of the most sensitive aspects of any sale. Tell them too early and you risk losing key people or customers. Tell them too late and you damage trust. There's a right sequence — and it's different for every deal.
10. How does my corporate structure (C Corp, S Corp, LLC, etc.) affect my sale?
Your entity type has significant tax implications for both you and the buyer. C Corps, S Corps, and LLCs are treated differently in asset vs. stock transactions. Understanding the tax consequences of your structure before you negotiate can save — or cost — you hundreds of thousands of dollars.
11. Should I seek multiple buyers or focus on one targeted buyer?
A competitive process almost always produces a better price and terms than a single-buyer negotiation. However, running a broad process isn't always appropriate. The right approach depends on your confidentiality requirements, timeline, and the specific buyers most likely to value your business highly.
12. When do I involve my attorney and CPA?
Early — but strategically. Your CPA should be involved before you finalize any financial representations to buyers. Your attorney should review any letter of intent before you sign it. Waiting until late in the process to bring in advisors is one of the most common and costly mistakes sellers make.
13. What information will the buyer require and when do I provide it?
Buyers will want three to five years of financial statements, tax returns, customer and supplier data, real estate information, equipment lists, and management details. The sequence and timing of what you share — and how you present it — affects both price and the buyer's confidence in the deal.
14. What are the steps that must take place prior to closing?
From signed letter of intent to closing, the process typically includes due diligence, purchase agreement negotiation, financing contingencies, regulatory approvals, real estate arrangements, and employee transition planning. Each step has its own timeline and potential complications.
15. How long will the process take from introduction to closing?
A typical transaction in the building materials industry takes four to nine months from first serious buyer contact to closing. Complex deals, real estate issues, or financing challenges can extend that timeline. Planning for the full duration — while running your business — requires realistic expectations.
16. Do I sell my stock or sell my assets?
This is one of the most consequential decisions in any transaction. Stock sales transfer the entire entity — liabilities included. Asset sales allow buyers to cherry-pick what they're acquiring. Buyers generally prefer asset deals; sellers often prefer stock deals for tax reasons. The final structure is always negotiated.
17. What's the impact of a stock vs. asset sale?
In a stock sale, you typically pay capital gains tax on the proceeds. In an asset sale, different asset classes are taxed at different rates — some as ordinary income. The difference in after-tax proceeds between the two structures can be substantial, and it's worth modeling both scenarios before you negotiate.
18. What becomes of my receivables?
Accounts receivable are typically retained by the seller in an asset sale and collected post-closing. In a stock sale, they transfer with the business. How receivables are handled affects your working capital at closing and your cash flow in the months that follow.
19. Should I sell my real property or lease it back to the buyer?
Many sellers find that retaining the real estate and leasing it back to the buyer creates a valuable long-term income stream — often worth more over time than a one-time sale. The right answer depends on your retirement income needs, the property's value, and the buyer's preference.
20. How will the sale affect the future of my employees?
Most acquirers in the building materials space want to retain experienced employees — they're buying the business, not just the assets. That said, there are no guarantees. Understanding a buyer's track record with acquired employees, and negotiating appropriate protections, is something many sellers care deeply about.
21. What will my 'cost of sale' be?
Transaction costs typically include advisor fees, legal fees, accounting fees, and any deal-related taxes or adjustments. These can range from two to five percent of transaction value or more. Knowing your net proceeds — not just the headline price — is what matters.
22. What will the buyer expect of me after the sale?
Most buyers require a transition period — typically three to twelve months — during which the seller remains available to introduce customers, train staff, and transfer institutional knowledge. Some deals include longer consulting arrangements or earnout provisions tied to post-sale performance.
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