Maximising value when selling a business can often mean selling to a customer or competitor and with the current market conditions as they are the return of the trade buyer has made this situation even more likely. Competitors are often the ones who are prepared to pay the best price, but this raises a number of tricky issues and careful management of the sale process is critical to achieving the right result.
Research, research, research
The value of research cannot be underestimated s, with the initial research playing a major role in the sale process and final outcome. The first step when selling a business is to prepare a list of likely buyers. Potential candidates need to be identified by in-depth research of the market the business for sale is currently operating in. This includes speaking to the major players, using the contact networks of the advisors and shareholders and utilising the international networks of corporate finance specialists to determine whether the likely purchaser will come form overseas. The next step is to agree a shortlist of parties to approach.
It is important to understand the strategies of the potential buyers, in particular their M&A plans. Some of this information will already be in the public domain but pre-screening buyers is an important step. The pre-screening process will involve speaking to, or meeting with, potential buyers to reach an understanding of their specific plans. This may even extend to asking questions relating to the area of the business that is for sale though not disclosing who the client is at this early stage
Understanding the key selling points of the business for sale and matching these to the strategies of the potential buyers is critical. There are key questions that need to be addressed at this time. Who is the business worth most to and what are the potential synergies available to the buyer - both sales driven and cost driven? Is there a gap in the potential buyer's strategy, in terms of their product lines, market segment or geographic coverage that could be improved by acquiring the business that is potentially for sale. Which competitors would find the client's business attractive to buy, perhaps because it would rather own it than compete with it?
Lastly, it is important to understand the key individuals who drive the potential buyers' business. Are they longstanding players? Perhaps they have a track record of buying and building businesses. Will they be able to gain support within their organisation to get a deal done?
What we often find is that the ultimate buyer is one of the first names on our list of potential buyers because it tends to be a competitor or a customer who ultimately sees most value in acquiring a business.
When Catalyst worked closely with a heating and plumbing equipment supplier the buyer was its major competitor.
The deal was quite a delicate one because we had to let the other side look at the details of the business but we could not reveal everything in the first instance. It had to be handled extremely sensitively.
The business was finally sold to its major competitor the outcome being a successful result for the vendors of the business who achieved an excellent price. The fit of the business with its major competitor made perfect sense but it was important to ensure that an advisor we understood the sensitivities of the deal without losing the buyer.
Tactics
In a transaction such as this you can't rush in and declare your hand too quickly when you are selling to a competitor and the same applies when selling to a customer. The first step is to prepare a tightly worded confidentiality letter which protects the client from potential buyers using information they learn from their discussions with you. This would include preventing them from using such information to target staff and customers, for example.
it is also imperative to hold back sensitive information until the last minute. Customer information is one such area, as it is vital to head off any attempts by the acquior to approach the customers of the business that is for sale until late on in the sale process. It is also at this stage that it will be important to make sure that there is a synergy between the two businesses. It should be clear that the two cultures are going to be a good fit and that all of the key individuals will be happy in their new roles.
Selling a business to a competitor or to a customer can be highly sensitive and fraught with potential pitfalls but, with the correct guidance from experienced advisors this may be the best route to take to meet the shareholders objectives.
Showing posts with label Selling. Show all posts
Showing posts with label Selling. Show all posts
Saturday, August 4, 2012
Friday, August 3, 2012
Avoid The Biggest Mistakes When Selling Gold To A CT Gold Buyer
What to Ask When Selling Gold
If you're new to the idea of selling gold scrap jewelry for cash, you may be wondering how to start. This experience can feel quite daunting at first. How do you select the best used gold buyers? How do you know CT gold buyers are giving you a good price for your gold? Most people have no idea what their broken jewelry is worth or how much gold it contains. Here are the top ten questions you must ask any used gold buyer in CT before dealing with them:
1. How long have you been in business?
Whether you are selling your gold locally or sending it away, look for a company that has been in business for at least five years, as this is likely to indicate a reputable business. Many local businesses have been in business for decades, while few internet-based gold buyers have been around for more than a year or two.
2. How do you determine the price you'll pay?
A reputable used gold buyer in CT should be willing to explain the process to you and will make sure that you understand their pricing. Watch out for gold refiners such as those who advertise on TV who quote you a price without any information to justify it, as you may have been offered an unreasonably low price for the gold you're trying to sell.
3. What about gemstones and precious metals?
If the gold has any other components, especially precious metals or gemstones, be sure to ask if they've been included in the price. Local CT gold buyers will often pay for quality gemstones included in broken jewelry. On the other hand, many internet and TV-based gold buyers will not pay extra, or will even deduct their weight from the gold weight when determining how much to pay you for the gold. In this case, you'd want to remove the stones before selling your gold.
4. Do you pay extra for designer gold jewelry?
Most mail-in used gold buyers will not consider the design or maker of the piece when computing its value. Pawn shops and local jewelers, on the other hand, may decide to pay you based on the design of the jewelry, as they can resell it in their store rather than sending it away to be melted down into solid gold. The same goes for old gold coins - the value may lie in the coins themselves, not in their gold content. Ideally, you want to work with a CT gold buyer who can recognize such pieces, point them out to you, and be willing to pay you a premium for them.
5. How soon do I get paid?
Most local dealers, such as jewelers and pawn shops, will pay you the day you come in. Services advertising on the internet or TV must receive your gold in the mail, weight and process it, and then send you a check. This process can easily take several weeks or more.
6. Are you the refiner or a middleman?
This question can help you understand how much of a profit the used gold buyer in CT must make on the transaction. Middlemen sell to the gold refiners, and must offer you a slightly lower price in order to make a profit when selling the gold. On the other hand, these are the used gold buyers that are easiest to find, as they tend to include pawn shops, jewelry stores, and other local buyers of scrap gold in CT.
7. What is your physical address?
This is easy to determine for gold buyers with a local store, but surprisingly difficult for many internet-based companies, which may only publish the P.O. box where you send the package of gold. In the last few years, many gold buyers have sprung up from seemingly nowhere. Don't send your valuable gold jewelry off to someone who isn't willing to provide a physical address. If they disappear, you'll have no way to track them down. Instead, opt to sell through a local company that has been around for years.
8. What is your shipping insurance policy?
This question only applies to services that require you to mail your gold to them, but it is absolutely crucial. If something does happen in the mail, you're out of luck unless you have purchased shipping insurance. While you can decide to purchase this service on your own, some CT gold buying services will cover your package up to a stated amount, which may be anywhere from nothing to several thousand dollars. You may also want to ask about their internal policies to make sure that your gold does not get lost, stolen, or mixed with other packages before you are paid what it's worth.
9. How is the offer presented?
When selling gold to a local used CT gold buyer, you will typically receive an upfront offer after the employee has weighed your gold and calculated its value. For mail-away services, you may receive a check in the mail, after which time you have a period of usually about 10 to 12 days to refuse the offer. You're better off dealing with a company that promises to send their offer promptly, rather than waiting for weeks before you'll know how much they will pay for your used gold.
10. How much do they pay for gold per gram?
Any gold seller should be willing to tell you what they are paying for gram of 10K, 14K, 18K, and 24K gold according to today's market price. The amount of money your gold is worth depends on the gold purity (known as karat), weight in grams, and the daily spot gold price, which is determined on the open market. Just as the stock market goes up and down every day, so does the price of gold. Expect a used gold buyer to pay about 80-90% of the top value of your gold. Check the daily price online or in your newspaper before selling your gold so that you know if they're using a price that is too low.
If you're new to the idea of selling gold scrap jewelry for cash, you may be wondering how to start. This experience can feel quite daunting at first. How do you select the best used gold buyers? How do you know CT gold buyers are giving you a good price for your gold? Most people have no idea what their broken jewelry is worth or how much gold it contains. Here are the top ten questions you must ask any used gold buyer in CT before dealing with them:
1. How long have you been in business?
Whether you are selling your gold locally or sending it away, look for a company that has been in business for at least five years, as this is likely to indicate a reputable business. Many local businesses have been in business for decades, while few internet-based gold buyers have been around for more than a year or two.
2. How do you determine the price you'll pay?
A reputable used gold buyer in CT should be willing to explain the process to you and will make sure that you understand their pricing. Watch out for gold refiners such as those who advertise on TV who quote you a price without any information to justify it, as you may have been offered an unreasonably low price for the gold you're trying to sell.
3. What about gemstones and precious metals?
If the gold has any other components, especially precious metals or gemstones, be sure to ask if they've been included in the price. Local CT gold buyers will often pay for quality gemstones included in broken jewelry. On the other hand, many internet and TV-based gold buyers will not pay extra, or will even deduct their weight from the gold weight when determining how much to pay you for the gold. In this case, you'd want to remove the stones before selling your gold.
4. Do you pay extra for designer gold jewelry?
Most mail-in used gold buyers will not consider the design or maker of the piece when computing its value. Pawn shops and local jewelers, on the other hand, may decide to pay you based on the design of the jewelry, as they can resell it in their store rather than sending it away to be melted down into solid gold. The same goes for old gold coins - the value may lie in the coins themselves, not in their gold content. Ideally, you want to work with a CT gold buyer who can recognize such pieces, point them out to you, and be willing to pay you a premium for them.
5. How soon do I get paid?
Most local dealers, such as jewelers and pawn shops, will pay you the day you come in. Services advertising on the internet or TV must receive your gold in the mail, weight and process it, and then send you a check. This process can easily take several weeks or more.
6. Are you the refiner or a middleman?
This question can help you understand how much of a profit the used gold buyer in CT must make on the transaction. Middlemen sell to the gold refiners, and must offer you a slightly lower price in order to make a profit when selling the gold. On the other hand, these are the used gold buyers that are easiest to find, as they tend to include pawn shops, jewelry stores, and other local buyers of scrap gold in CT.
7. What is your physical address?
This is easy to determine for gold buyers with a local store, but surprisingly difficult for many internet-based companies, which may only publish the P.O. box where you send the package of gold. In the last few years, many gold buyers have sprung up from seemingly nowhere. Don't send your valuable gold jewelry off to someone who isn't willing to provide a physical address. If they disappear, you'll have no way to track them down. Instead, opt to sell through a local company that has been around for years.
8. What is your shipping insurance policy?
This question only applies to services that require you to mail your gold to them, but it is absolutely crucial. If something does happen in the mail, you're out of luck unless you have purchased shipping insurance. While you can decide to purchase this service on your own, some CT gold buying services will cover your package up to a stated amount, which may be anywhere from nothing to several thousand dollars. You may also want to ask about their internal policies to make sure that your gold does not get lost, stolen, or mixed with other packages before you are paid what it's worth.
9. How is the offer presented?
When selling gold to a local used CT gold buyer, you will typically receive an upfront offer after the employee has weighed your gold and calculated its value. For mail-away services, you may receive a check in the mail, after which time you have a period of usually about 10 to 12 days to refuse the offer. You're better off dealing with a company that promises to send their offer promptly, rather than waiting for weeks before you'll know how much they will pay for your used gold.
10. How much do they pay for gold per gram?
Any gold seller should be willing to tell you what they are paying for gram of 10K, 14K, 18K, and 24K gold according to today's market price. The amount of money your gold is worth depends on the gold purity (known as karat), weight in grams, and the daily spot gold price, which is determined on the open market. Just as the stock market goes up and down every day, so does the price of gold. Expect a used gold buyer to pay about 80-90% of the top value of your gold. Check the daily price online or in your newspaper before selling your gold so that you know if they're using a price that is too low.
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