Should I Sell My Business On My Own or Hire a Professional?
We were recently contacted by a business owner who tried to sell his business by himself. He was concerned about confidentiality and wanted to save money on commission fees. After 8 unsuccessful months, he had two deals fall apart, the confidentiality was breached, and he lost a long term employee.
Although it is possible to sell your business on your own, doing so will distract you from the day to day operation of the business. It consumes time when your focus should be on maintaining or increasing the value of your business. During the sale of this client’s business, we proved to him why hiring an experienced business broker can pay huge dividends, and offered the following solutions:
- Confidentiality. Without this, employees, customers, suppliers and bankers all get nervous and competitors look to make a kill. By utilizing a business broker, we have the ability to keep the sale confidential.
- Business Continuity. Selling a business is time consuming for an owner who already is wearing many hats. When our client took on the additional responsibility of selling his business, essential functions got less attention and he ran the risk of damaging the business.
- Marketing and Reaching Potential Buyers. We have the tools and resources to reach the largest possible base of buyers. We screen these potential buyers and verify that they have the financial resources to support the potential acquisition. We understand the key values buyers are looking for and present those in order to maximize the sale price.
- Valuing the Business. Putting a value on a business is far more difficult and complex than valuing a house. Every business is different, with hundreds of variables that have an impact on the value. When our client tried to sell his business on his own, he based the company value on two things: what he needed for retirement and his “sweat equity.” After doing our own independent valuation on the business, our client was pleasantly surprised to learn that his business was worth more than he expected. Business brokers have access to business transaction databases that can be used as guidelines or reference points. The best way for a business owner to truly feel comfortable that he got the best deal is working with an experienced professional that understands the market, how to finance the acquisition and successfully obtain the fair market value for their business.
- Experience. Most business owners sell one or maybe two businesses in their lifetime. Professional business brokers sell hundreds and therefore are able to understand the financial, operational, and legal issues of your company. We helped guide our client to make his company more saleable. Furthermore, as professional negotiators, we know how to overcome the many obstacles that often prevent a sale from closing. We don’t fall prey to personal emotions and we leverage our experience to help our client receive the best possible price and terms for his company.
- Closing a Deal. Since the business broker’s sole function is to sell the business, there’s a much better chance that a deal will be closed in less time. The faster the sale, the lower the risk of employee problems, customer defection and predatory competition.
By utilizing the Benjamin Ross Group, this led to a successful sale of the company in a short period of time. The following was done by us:
- Protected the identity of the company and preserved confidentiality during the sale and marketing process.
- Kept the deal on track and ensured all parties met the necessary deadlines–a key contributor to a successful sale, as time kills deals.
- Screened potential buyers and confirmed that they had the financial resources that would support the potential acquisition.
- Enabled the owner to maintain a focus on running his business, while we focused on the sale.
- After doing our own independent valuation on the business, our client was pleasantly surprised to learn that his business was worth more than he expected. Business brokers have access to business transaction databases that can be used as guidelines or reference points.
At the closing table, our client turned to us and said he will never begrudge paying a good professional again.
So, if you are trying to decide whether to go it alone or hire a professional, ask yourself if you really have the time to run your business, compile marketing materials, advertise, screen buyers, give tours, facilitate due diligence, arrange financing, risk losing clients and employees? When you’re looking to sell, you want to put even greater emphasis on running your business and boosting your sales – not taking on new challenges.
Ask yourself another question–am I likely to have more money in my pocket after a sale by using a professional business broker, as opposed to going it alone and possibly making a big mistake?