Have you every thought, "who can sell my business"? There are several industry professionals who can help you sell your business.
For small to medium sized enterprises, you're most likely to work with:
- Business brokers: These professionals specialize in helping entrepreneurs and private equity groups buy and sell businesses. They typically handle all aspects of the sales process, including business valuations and benchmarking, marketing it to potential buyers, and negotiating the deal to achieve the best sale price.
- Lawyers and accountants: These professionals can assist with legal and financial aspects of the sale, respectively.
Large businesses and corporates may also involved:
- Mergers and acquisitions (M&A) firms: These firms specialize in helping larger companies buy or merge with other businesses. They may also help smaller businesses sell to larger companies.
- Investment bankers: These professionals specialize in helping large companies raise capital through initial public offerings (IPOs) and other financial transactions. They may also help businesses sell to other companies.
Ultimately, how you decide to sell your business will depend on factors such as the size and complexity of your business, your goals for the sale, and your personal preferences.
For simplicity, this article will discuss the role of the first three professionals above; Business Brokers, Lawyers and accountants.
Selling Your Business Using a Business Broker
When it comes to selling a business, the process can be daunting for novice business owners. This is where business brokers come into play. They help facilitate a smooth and successful sale. Business brokers act as intermediaries between you as the seller, and the multiple prospective buyers.
A business broker should help you to determine the value of your business. They can provide a comprehensive business valuation, taking into account your company's liabilities, assets, cash flow, and future earnings potential. This information is crucial when it comes to setting an asking price and negotiating with potential buyers.
Business brokers will also help you prepare your business for sale. They provide guidance on how to make your business more attractive to potential buyers - addressing any areas that may need improvement. They may ask you to update your financial statements, resolving outstanding legal issues, or improving the presentation of your marketing and branding.
Overall, the role of business broker is to help you navigate the complex process of selling your business, from determining its value to finding potential buyers and negotiating a successful sale. With their expertise and guidance, business owners can achieve a smooth and successful sale, while getting you the best price for your business.
Accountants & Lawyers
Accountants play a crucial role in ensuring that the financial aspects of the transaction are handled accurately. They can help business owners prepare for the sale by organizing and analysing financial records, providing guidance on pricing, and identifying potential tax implications. Additionally, accountants can:
- verify financial data
- ensure that the terms of the sale are fair and equitable
- provide valuable insights into the overall financial health of the business
- identify areas for improvement to maximize its value in the eyes of potential buyers
Lawyers also play a crucial role in ensuring that your interests are protected during the sale process. A good lawyer will:
- help the seller understand the legal implications of the sale, including issues such as tax obligations, regulatory compliance, and contractual obligations.
- provide guidance on how to structure the sale to minimize risks and maximize value.
- assist with the preparation of the purchase agreements, disclosure statements, and any other legal documents required by the transaction
- help negotiate the terms of the sale with the buyer's legal team, ensuring that the seller receives fair value for their business.
Geoffrey
Lloyds Corporate Partner - Mergers & Acquisition Specialist
Jack
Corporate Advisory
Dianne
Research Director and Corporate Broker
Overall, the role of accountants and lawyers in selling a business is to provide expert guidance and support throughout the transaction process, ensuring that your interests are protected at every step!
Should I sell my own business?
Selling a business is a complex process with significant financial, legal, and emotional implications, and doing it without professional support often leads to lower valuations, prolonged timelines, and increased risk. Consider the following points:
- Business owners tend to overestimate or sometimes underestimate the value of their business due to emotional attachment or lack of current market insight. An advisor can provide an objective, well-researched valuation based on industry standards, recent market data, and financial analysis, which better positions the business for fair pricing in the market.
- Corporate advisors have established networks and access to qualified buyers, including private equity groups, strategic buyers, and institutional investors, which can be difficult for individual sellers to reach. Advisors also understand buyer behavior and can identify the most interested and financially capable buyers.
- Advisors understand the intricacies of deal structuring such as earnouts, seller financing, and tax-efficient options. This ensures sellers maximize financial outcomes. They can create scenarios that help both sides align and meet strategic goals, increasing the likelihood of a successful close.
- Selling a business requires significant time and effort that distracts owners from daily operations, which can reduce business performance during the sale process. Advisors manage the sale process, allowing owners to maintain focus on business operations and retain the company's value.
- Business sales negotiations can be intense, involving price, terms, contingencies, and post-sale commitments. Experienced advisors bring negotiation skills and market knowledge to maximize the seller's position and avoid common pitfalls, particularly when facing skilled buyers who may exploit an owner's inexperience.
- Business sales involve substantial legal documentation and compliance obligations. Mistakes can be costly and time-consuming, with risks of litigation post-sale. Advisors have the expertise and resources to guide sellers through the legal process, coordinating with attorneys to ensure the transaction adheres to legal standards and minimizes risk.
- Advisors know how to create competitive tension and leverage strategic interests, which can increase the final sale price and improve closing probabilities. With a clear process, strategic preparation, and marketing, an advisor-led sale attracts better offers and helps sellers achieve their objectives more efficiently.
