Monday, February 10, 2014

How to sell my business for lowest cost


When business owners arrive at the inevitable “intersection of decision” to sell their business versus shutting it down the vast majority genuinely desire to have the business carry on while cashing out for all their hard work. A few discreet conversations with other business owners and trusted advisors leads to the decision to engage a professional advisor.

After talking with a few transaction advisors and/or business brokers, the business owner is often somewhat surprised at the fees involved in successfully preparing, working, and closing the sale. Why do I have to pay someone so much money to sell a business I have worked so long and hard to build? 

Our 15 + years of experience has taught us rather than arm wrestle with the advisor to get the lowest fees, you may want to engage an advisor that can achieve the best deal structure. Any business owner would happily pay a dollar to receive many dollars back. It all comes down to how you view the return on the investment.

Consider the business owner that engages a professional team to present his business best foot forward: The professional advisor ensures the financials get reviewed and cleaned up, the corporate documentation is updated and current, the operations get reviewed for strengths and weaknesses, develop a valid and defensible valuation, represent the business in a well-documented Confidential Information Memorandum, discreetly and confidentially contact strategic buyers in a broad marketplace, then negotiate an overall deal that fairly compensated ownership with terms and conditions that achieved majority of the owners priorities, and manages the whole process. The fees involved to complete that process provide the owner with a Return on Investment of a successfully completed transaction.  What is that worth to you?