If you’re thinking about selling your business in the next few years, you’ll need a team of professionals on your side. At a minimum, your accountant, attorney, and wealth manager should be aware of your plans so they can help you avoid costly pitfalls and plan for a smooth closing.
It won’t come as a surprise that we recommend that you consult with an M&A Advisor or Business Broker as well; we make our living helping owners get full value for their business and making sure deals stay on track. A professional broker can help you price your business appropriately, provide advice on how to maximize value, and make sure the terms of your deal are in your best interest.
Most professional and strategic buyers have dozens of deals under their belts, while for most owners, selling their business is a once-in-a-lifetime event. Selling your company is also the most complex transaction you’ll probably ever be a party to; finding the time to manage discovery or negotiations while running your company can be overwhelming.
Choosing the right broker for your sale can make the difference in a quick, clean, and profitable closing and a deal that favors the buyer over the seller – or one that simply falls apart. How do you find the right advisor for your sale?
Ask for referrals from owners who have successfully sold their companies.
Ask about the process, the timeline, and any ways the broker saved the owner from costly mistakes or unfavorable terms. Your local or state professional associations (such as the International Business Brokers Association or IBBA) will also have a list of members with successful track records.
Your attorney, CPA, or lenders specializing in business sales may also have referrals for you. They can provide information on how well-organized a broker is and how well they understand the process of obtaining funding and closing a deal.
Look for a broker with certifications that prove they know how to get deals done.
As is the case with many professions, industry associations like IBBA provide training and certification for their members. Look for reputable third-party certifications such as Certified Business Intermediary, Certified Business Broker, or Certified Mergers and Acquisitions Professional. To obtain such certifications, a Broker or M&A Advisor must complete specific training, pass exams, and provide the certifying organization with documented proof of having successfully Closed multiple transactions. That provides clients with the assurance the person not just talks the talk, but has walked the walk.
Look for someone who understands your business model.
A broker may have completed deals, but if they don’t understand how your industry works or how you make money, they may not value your business appropriately or grasp the nuances of your niche. Understanding the value of your proprietary processes, intellectual property, customer agreements, and brand will all factor into pricing and marketing your company. You only get one chance to make the first impression with a Buyer, so getting it right matters.
Finally, Find someone you can trust and work well with.
Ask about how the broker packages and markets companies, and how they actively pursue potential buyers. They should be able to articulate a detailed plan with action steps, milestones, and safeguards for confidentiality. Ask about the quality of their buyer database and how engaged they are with prospects. Make sure you’re paying for action rather than simply for a listing. Are they going to be personally involved with every step of the process until the deal is done, or are they going to delegate your transaction to the rookie on their team? For the most important transaction of your life, you should ensure you’ll be receiving white glove service from someone who has your best interests at heart.
Find someone you are comfortable with and whose communication style and response time is a good fit for yours. You’ll be working with your broker for months, dealing with complex issues and many details, so if you’re not a good fit, the process could be miserable for you. Trust your instincts on this; if you just don’t click in your first meeting or two, find another broker.
A professional broker with the right experience will pay for their own fees by saving you time, money, and stress during the process. They’ll also make sure the business is marketed aggressively to generate multiple interested parties and offers quickly so you know you’re getting the most value for your company.
If you’re interested in learning what your business is worth, we offer a complimentary and confidential opinion of value.
