Whatever the reason is for you to sell your business, you will want to get the highest possible price for the entity that you’ve built and nurtured. As a successful business owner who was able to start up and grow a profitable business, you assume that selling your business should be something you can do yourself. But should you?
Professionals in both law and medicine who are experts in their respective fields don’t normally represent or treat themselves or their families for a major reason – they don’t have the objectivity required or the time to do their best job. And along those same lines, selling a business can be an emotional exercise which is better left to an objective business broker.
Selling Your Business is a Full Time Job
How many of you can handle your current full time position and then add another 60 hour per week job doing something you have never done before? That’s what you, the owner of a small business, would have to do to sell your business on your own. You can certainly add the extra hours just like you did when you first started, but you then leave your business without a leader while you focus on all that is necessary to successfully complete the sale. In most instances a business owner only sells a business once and has no training in business brokerage most always resulting in lost value in the business.
Why Hire a Business Broker
The role of a professional business broker is to assist you in buying or selling a business by providing you with the tools and advice to make a solid decision. When the time comes to finalize the sale, the broker can be an enormous help in coordinating all that is necessary to execute the sale.
Here are the challenges an owner faces when trying to sell their business:
- How do I maintain confidentiality so that employees, customers and vendors don’t panic?
- What are the value drivers of my business that I need to address prior to putting the business up for sale to maximize price and obtain reasonable terms?
- How do I market my company without telegraphing my actions to my competition while trying to attract the best buyer?
- How do I bring multiple buyers to the table at the same time so I can conduct a controlled auction prompting the best buyer to make his best offer the first time?
- How do I handle my emotions and pride in the company I’ve built when a buyer finds defects and uses them to attempt to negotiate a lower price and better terms?
By engaging with a professional business broker, you will be able to partner with someone who can alleviate these challenges, buffer you from any of the emotion and take over the following tasks, letting you continue to fully focus on running your business to maximize value and price:
- Value the business
- Structure the deal
- Handle negotiation
- Keep it confidential
- Help on financing
- Manage the timing
- Handle the marketing
- Prepare the documents
- Deal with multiple buyers
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To obtain other professional’s perspectives on this topic, you might want to refer to articles about selling your business that are posted on the New England Business Broker’s Website as well as on the International Business Brokers Website. There are also some professionally written articles by Tom West, a recognized expert about selling your business posted on the Alpha Business Group Website you should review as well.
Selling your business can be an exciting but emotional activity that is best handled by an objective third party. If you are planning your exit strategy I hope that you consider why the best representation you can obtain in transferring ownership in your business is not yourself, but a trained and experienced professional business broker.
What are your opinions on selling a business yourself or hiring a business broker to help?