How it works: Selling/Retiring
RedTire acts as a matchmaker between business owners looking towards retirement and exiting their businesses and either highly qualified graduates who have the expertise and ambition to run those businesses or experienced business practitioners looking towards being their own boss by buying and running their own business. Although each transaction is modified to ensure a successful ownership transition, the general steps in the RedTire selling process are as follows:
Step 1: Making contact
Candidate businesses (“Sellers”) are identified via application on this website OR by posting back prepaid postcards which are direct mailed to them OR by recommendation from friends and associates of RedTire (past satisfied buyers and sellers, partner universities and colleges, local bankers, accountants, attorneys and economic development officials).
Step 2: Initial outreach
Within a week of your initial inquiry, a member of our team will reach out to discuss candidate company (“seller”) needs, outline the RedTire program in more detail and help you understand the process involved in transitioning your business to a qualified candidate replacement owner (“buyer”).
Step 3: Enrolling in the Program
Potential businesses MUST then enroll in our program via the online application form located on this website. This application helps us identify how your business “fits” within the scope of the program and requires a brief a summary of your company’s financial history and reasons for selling. All information will be held in the strictest confidence and will NEVER be shared with any aspiring buyer unless Non-Disclosure Agreement (NDA) has been signed by both parties. Your desire for discreetness and confidentiality is of utmost importance to us and we allow you to be your own vetting agent in whom is allowed to pursue an acquisition of your business.
Step 4: Reviewing your application and establishing “fit”
Within five working days of receiving your form, a member of our team will review your application and contact you regarding whether or not RedTire’s services would be beneficial to you at this stage in your business transition.
Step 5: Phase I Due Diligence (SWOT analysis)
If you are selected and your business qualifies for RedTire’s services you will be asked to complete a Phase One Due Diligence Questionnaire. You will also be required to provide additional financial statements, important statistical reports and pictures of your business or practice that our finance team will use to craft an accurate business valuation during a semester of work.
Step 6: Determining a slot to undertake the Valuation
No later than five days from receipt of the submitted questionnaire and detailed financial information, RedTire will alert you to your acceptability as a candidate business and assign you a slot when the valuation review will take place. Since we tend to work on a semester-to-semester basis, due to the use of intern student financial analysts, often projects will often coincide with the Fall & Spring intakes (with some summer projects also undertaken).
Step 7: Delayed start or future work
If no “spots” are open at any time a delayed start could be worked around your needs and your information will be retained for possible future project work. Should you decide you are no longer interested in being enrolled in our program you can simply request that your candidacy information be destroyed, which will be confirmed via an email notification.
Step 8: Business description / Website listing
Within the first 2 weeks of the valuation review, a draft listing will be provided to you for your review. Once the valuation description has been finalized, your business will be listed on our website under the Business Listings tab on this website. In the event you already have a potential buyer interested in purchasing your business or practice, at your and their request, we may keep the transaction private and not list it. However, we will require the potential buyer to enroll in our program by completing the Aspiring Business Owner Application. Again no specific information will be shared without both parties signing a Non-Disclosure Agreement.
Step 9: Financial review, Phase II Due Diligence and Valuation
An extensive review of all materials will be undertaken and a Phase Two Due Diligence Questionnaire to help refine the Valuation Tool. Within eight to ten weeks of an allotted time slot and receipt of all the data, pictures and information, RedTire will arrange a meeting or phone call at which an ‘opinion of value’ or estimate of the business' purchasable value will be presented. This estimate is based on generally accepted business valuation approaches and models and will be represented as an ‘independent value range’ for ONLY the business aspect, as an ongoing concern, i.e. inclusive of fixtures, fittings and equipment needed to run the business. Specific purchase price and deal terms will, of course, be mediated via the RedTire program to allow the retiring business owner (seller) and replacement management (buyer) to negotiate those terms.
RedTire will provide a valuation of the business as a “TOOL” to help with the mediation and negotiation between retiring business owner and the replacement business management. The valuation and attendant deal terms are intended to help both parties proceed to a successful buy/sell negotiation, and does not represent an obligation on any parties behalf.
Step 10: Transactional, Banking and Legal phase
The RedTire team will be available to help both the business owner and the replacement management conduct a successful purchase and transition. The initial offering and drafting of a letter of intent (LOI) will be the start of the transactional phase of process.
All of the RedTire functions and activities are provided pro bono (free of any charge) and there is no obligation for any payment whatsoever for any services provided. It is our sole purpose to help successfully connect retiring owners and replacement management to further grow the economy here in the mid-west and provide more good paying jobs for its citizens. Of course, the ongoing viability of the program is also supported by gifts or donations made to the program via KU Endowment by highly satisfied clients.