Selling your business is a huge decision that can affect your entire life. Of course, we all want the best possible outcome of our business sale. However, attempting to handle it yourself can be a difficult. The deal will require meticulous planning, marketing, and the preparation of specific financial and legal documents needed to properly complete the transaction.
The first decision you must make is whom you want on your sales team. Your decision will likely vary depending on the complexity of your business, and the amount of time you are willing to devote to the sale.
You may be asking yourself whether you need an accountant, an attorney, or an entire team, including appraisers, brokers, and consultants. To answer this question, you must first understand how each of these particular roles fits into the business selling process:
- Will you require a professional appraiser? Any business that involves property, brands, proprietary processes, or assets will require some type of valuation expert. Many business brokers also act as appraisers, and if this is the case, then a specialized appraiser may not be necessary.
- Will you need to hire consultants? A competent consulting firm may help you get a significantly higher selling price by suggesting you implement a variety of pre-sale business improvements. If that's the case, the extra fees for the service may be well worth it.
- Should you hire a broker? A broker can be an essential piece of the puzzle for those with limited experience in selling a business. They are also helpful for owners who have experience selling, but who prefer to spend their time and efforts on the day-to-day operation of their business.
The Main Benefits of Hiring a Broker:
- A broker can focus on the sale as you focus on business performance.
- A broker can be a bridge or buffer between you and the buyer.
- A broker can handle the legal aspects of the sale and financial documentation.
- A broker can take care of unexpected challenges that may arise.
An appraiser or broker can be especially beneficial for hard-to-price businesses. Brokers and appraisers can help determine the value of your business as well as the associated asking price. Just be sure your broker or appraiser has the proper credentials. A good broker will require fees. However, those will pale in comparison to the value of the services they provide and the post-sale profit they can help generate.
How to Find the Best Broker For Your Needs:
- Visit the BizBuySell Broker Directory, the largest directory of business brokers online, or get referrals from business associates, your attorney, and your CPA.
- Make sure the broker you're considering handles business sales (as opposed to real estate sales).
- Learn the different types of business brokers and determine whether you need a mergers-and-acquisitions specialist (for a multi-million dollar corporation) or a main street business broker (for smaller businesses).
- Meet with and interview a few brokers to ensure a reasonable fit. Ask whether they've worked before with businesses like yours. You may need to interview several brokers before finding the right one.
- Discuss their experience and how long they've been in business. Get proof of their certification and ask to see their annual sales records. Find out if they are part of a group or a solo practitioner. Ask how they intend to market your business.
- Clarify upfront the relationship you'll have with your broker. Do you need them to operate in a fiduciary or transitional capacity?
Confidentiality is Key!
Your business must still run as a well-oiled machine during sale preparation and throughout the process of handing over the reins. Customers, staff, and especially prospective buyers may spook easily when too much information about the sale of a business is released. Don't forget to obtain confidentiality agreements with any professional sales agents, consultants, and legal or business advisers on your team.
Professional business advisers can help, but where do they fit in? Let’s take a look at that.
How Advisers Aid the Business Sale Process:
- They help prepare the sale for an accountant, attorney, appraiser, consultant, or broker.
- They assess markets to determine the best sale price, thus acting as a marketing broker.
- They can negotiate deals on your behalf with an accountant, attorney, or broker.
- They may act as a closing broker or may expedite the closing process.
Remember, a strong business requires strong leadership, and only a great leader can ensure a great sale! However, having the right team in place can make the selling process a whole lot easier.
Next Step: Connect with a Business Broker
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