When the day comes to cash in your chips and sell your business to a worthy successor, it may be tempting to handle the sale yourself. After all, no one understands your business better than you. Yet, this may likely be the most important transaction of your life, and it is one that you want to get right the first time. You’ll likely need access to a team of advisors, including a business attorney, a CPA, and a tax advisor. But you also should consider employing the services of a professional business intermediary, commonly known as a “business broker.” Why is that? Here are a few reasons to consider…
Establish realistic expectations.
For most business owners, selling a business is a once-in-a-lifetime event. While they know what they’ve invested in the business in terms of money, hours, and toil, they usually have little idea what kind of asking price would be considered fair and what kind of terms might likely be offered in today’s market. A professional intermediary can review your financials, advise you on the most probable selling price, and educate you on what is important to today’s buyers.
Your time and talents are valuable.
How would your business fare if a considerable amount of your time and talents became diverted to screening dozens of “tire-kickers”, with some of them even asking unreasonable or even insulting questions about your business? You’re likely better off spending your energy in continuing to grow your business, thus making it more attractive to the right buyer. An experienced business broker will know how to quickly distinguish “ready, willing, and able” buyers from those who are naïve, less than serious, or have no money.
Reach a broad audience.
You might already know someone who has previously expressed an interest in one day acquiring your enterprise, such as an interested customer, a key employee, or a family member. But that rarely works out. There may be a better qualified (financially and skill-wise) buyer out there to be reached. A good intermediary knows how to reach a sizable audience with an outstanding marketing package that honestly describes your business’s key features. In fact, they probably already have a database of folks who are already seeking to acquire a good business.
Maintain confidentiality.
You likely don’t want your employees or customers to know you’re exploring a sale. A professional intermediary typically advertises a business in a way that sufficiently describes the business without identifying the name and specific location. Details about the business are normally not shared prior to securing a non-disclosure agreement and proof of financial means.
Negotiate the best deal.
With the experience of many deals behind them, a good intermediary can fight for you to get the best possible terms. S/he has come to understand what is important to you, and they’ve aligned their interests with yours. Their fees are often a percent of the sale price, so getting you the best possible terms is in their best interests.
You don’t want to be the ‘Circus Ringmaster’.
In most transactions, many more players are involved than just the buyer and the seller. Each party may likely have its own attorney. The buyer may have a lender with their own questions about the business. Each party may have a CPA or other financial professional advising their respective clients. And don’t forget that many businesses are in leased locations, meaning there is a landlord to deal with. A professional business intermediary stands in the middle of this circus, managing the expectations and deliverables of each party. All of this is done to manage a schedule so that a successful transaction closing can occur by the agreed-upon date.
Finally, there will be obstacles.
With so many moving parts, something is bound to come up that puts the transaction in peril. An experienced and resourceful business intermediary knows how to seek a solution that helps you achieve your goals.
You’ve worked hard to build a successful business. Once you’ve decided to exit the ranks of ownership, it pays to have an experienced team of advisors to guide you. More often than not, that team should include a professional business intermediary.
Selling Your Business? That’s Not the Time to D-I-Y.
Randy Mitchell | Certified Business Intermediary, International Business Broker Assoc.
VR Business Sales of Charlotte
Valued Representation is the meaning behind the VR brand; it’s what they deliver to every client. VR Business Sales / Mergers & Acquisitions has been a leader in the sales and transfer of privately held businesses since 1979. VR has helped hundreds of thousands of families live the American dream of business ownership. These same people are those who make up the business communities in every town and city, and who drive job creation and economies. If you are ready to buy or sell a business, connect with Randy Mitchell at VR Business Sales of Charlotte.
Dye Culik PC will occasionally invite unpaid guest writers to share topics related to business and franchise topics. As with all our articles, these guest articles are not considered legal or other advice, and any questions about the content should be directed to the guest writer using the contact information included.
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