Here’s Some Suggestions On Selling A Business You May Want To Consider

Regardless of the size of a business for sale, there are similar elements that need to be covered off.  As the size and related complexity of the business grows, there will be more service providers interested in providing you with services to aid the process.

Lets face it, when business sales get into the millions of dollars, there will be cash available to pay for fees, so more service providers throw their hats into the ring to potentially become one of your advisers.

There are the obvious advisers such as your accountant and lawyer, but there are also business valuation experts to help establish the sales price, business optimization experts to help increase the value of the business prior to sale, taxation specialist that can help with more complex tax savings strategies that may be beyond the expertise of your own accountant, business brokers who put your business up for sale and market your business to buyers, financing specialists that advise you how to make the business more finance-able for the buyer, investment consultants that want to help you optimize the future value of the proceeds you get out of the business, and so on and so on.

These various services can each be provided by a specialist or sometimes one individual can fulfill multiple roles.  There are also merger and acquisition firms that bring all the pieces together so its more of a one stop shop to consider.

If you spend any amount of time talking to all these experts, you’re head will start spinning from the multitude of issues they raise leaving you wondering how anyone successfully sells their business without losing their mind in the process.

Here are some survival tips to consider when selling a business.

First, its always good to start at the beginning.  Evaluate your existing advisers to see how they stack up to the challenge ahead.  Just because you’ve had the same lawyer or accountant for 20 years doesn’t mean they can provide the level of service you require for this very specialized and sometimes complex transaction.

Lawyers and accountants all specialize in different areas.  If your lawyer and accountant do not specialize or at least have significant experience helping their clients sell businesses, then you’re going to have to find individuals that do.  Many times people have a comfort level and confidence level in certain individuals and want them to assist regardless of the need.  I can only say that I definitely don’t want a foot specialist to perform open heart surgery on me and the same type of logic applies to the specialties and abilities of your key advisers.

Here’s another way of looking at it.  If you engage someone to help you that is not well versed in all the ins and outs of a sale transaction, you’re likely going to have an adviser who is going to take an ultra conservative approach in order not to risk making a mistake.  When selling a business, you need advisers who are skilled at working through all sorts of issues that can arise.  There is definitely an art of the deal and you want to be working with deal makers, not people who have great intentions without the requisite experience.  Remember that if the deal falls apart one time or many, they are still going to send you a bill for all the time they spend.  So make sure you’re investing in someone that really knows what their doing with respect to selling a business.

Existing advisers tend to have networks of other professionals that can lend a hand in areas they are not focused on.  So even if they are not themselves the best resource for you, they could very well lead you to a qualified referral that you can have some confidence in versus starting from scratch.

You may also want to consider working with a business consultant or firm that specializes in business sales support.  After all, selling a business is a project management exercise, so unless you’re planning to project manage all aspects yourself, you are going to need some help covering off all the key areas that can kill the deal or destroy value for you.

The use of advisers should be looked at as an investment whereby whatever you pay out for help will provide you with a solid return from the money you get to keep from the sale.   So every adviser or service you consider should be able to clearly show you how an investment in their efforts will provide you with a positive return.

If what they offer cannot be easily quantified into real value in simple terms, then pass.  Valued advisers understand that they must provide you with a return on your investment to them.  Unfortunately, many of these service providers don’t have this mindset, so you’re going to have to weed out the ones that don’t so you’re not wasting time and money.

Remember that having a good team will not only get your business sold faster, but also increase what you put in your pockets.

By starting with the selection process, and putting in the effort towards drafting the right players for your team, you will greatly increase your probability of a successful sales process.