Seeking Advice: Selling a Family-Owned Security Business

April 24, 2024

by an intermediary from Duke University in Atlanta, GA, USA

Hi all - not sure if this right place to post this, but throwing it out there anyway.

I'm not a seller or buyer, at least not directly; however my parents have indicated they may be looking to sell their security business (they are a system integrator) in the next year or so & I’m hoping to help them by facilitating that. They have some idea how a sale might happen via friends in the industry that have sold their businesses in other parts of the country, but they haven’t done any real work along those lines and are in no rush.

Admittedly, I’m quite green here. My background is in starting/building software companies, so most of my experience is in venture fundraising/financing, not small business M&A.

I’d love to get a better understanding of how to run a process around something like this when my parents are ready, and I'm hoping for a couple of things out of this post:
1. Any resources that may be useful -- e.g. what materials to put together, what to think about when selling, etc.
2. Anyone that would be willing to chat to help me learn how to best facilitate a sale

Reply by a searcher
from Arizona State University in Phoenix, AZ, USA

Hi Jas, your parents will likely engage a broker or investment bank depending on the size of the deal. They will help guide your parents through the process, put together marketing materials, and market the deal.

It's great that you're asking these questions in advance, I would look at it from the buyer's perspective - what will they want to see? Some examples will be historical financial statements, HR data (personnel, salaries/rates/hours), and fixed assets (all of which need to tie together). What will they want to know? Revenue mix - e.g. recurring vs non-recurring, revenue streams, customer concentration, etc. The intermediary will guide your parents through all of this and engaging them can kick-start strategic discussions.

It can take a village but running a process with the right partner is almost always worth it. Feel free to DM me on here if you want to chat.

Reply by a professional
from Bentley College in Miami, FL, USA

There are a few ways to approach it. First, you want to make sure that you understand the process and that the business is ready for eventual sale. You can hire an "Exit Prep" advisor to assist you with this. Typically, it's recommended to start this process 2 or 3 years before you want to actually sell the business. Not a rule but just a best practice. If you'd like introductions to these types of advisors, send me an e-mail redacted
I'd also recommend you take a look at a website and newsletter called They Got Acquired.

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