When selling your business, the fundamental objectives should be to:
- Maximize the price
- Minimize the amount of Seller Financing
- Ensure the structure of the transaction gives you the best tax treatment and after tax dollars
- Close the transaction in a manner that absolutely minimizes any litigation risk after the business is sold
The best way to ensure these objectives are met is to follow a disciplined process which:
- Packages your business in a professional manner
- Develop and contact a thorough list of prospects so that the business is confidentially exposed to all potential buyers
- Screen and qualify interested parties as to their business acumen and financial capability
- Structure Letters of Intent that have all the key deal points agreed between the parties “up front”
- Ensure the due diligence is done completely and in writing as an exhibit to the legal documents
It is certainly possible for a business owner to follow the process described above. But most successful business owners we’ve met “know what they don’t know” and recognize their best interests are achieved by retaining an experienced, professional intermediary to facilitate the sale of their business.
Clearly the intermediary will charge a fee (which should only be paid if the transaction closes). But the right M & A professional will add significant value in the transaction which should more than justify the fee paid.
Interview several business brokers before making your decision, and then ask for references of clients that have been through the process. Make sure one of the questions you ask the reference is; Do you believe Mr. Broker x added value in the transaction that was commensurate with the fee they were paid?