Using a Business Broker or M&A Advisor when Selling your Business
Written by contributing author Attorney Shawn Dontigney at Fournier Legal Services.
Managing your business is challenging enough, but selling your business can be even more complicated. It is important to start planning for your sale or exit strategy several years in advance of an anticipated transaction. In our experience, clients who work with experienced brokers or merger and acquisition (M&A) advisors have a far better experience during their sale or exit process.
Fortunately, in addition to providing you with the legal services required to complete a business sale, we can also assist you by providing a warm referral to a broker or M&A advisor. Here are four primary reasons why a business broker can benefit you in a business sale:
- Increasing Pre-Sale Value. A broker can help you increase the value of your business prior to sale. By making pre-sale improvements, you build a stronger case for selling your business at an attractive price. A broker can find areas of needed improvement, including, for example, increasing customer retention, cleaning up personnel files, and increasing profit margins, all of which may improve business value and better position the company for sale. Because brokers are likely to significantly increase the sales price, they effectively more than pay for themselves.
- Identifying Interested Buyers. Brokers have the knowledge and unique resources to locate buyers in your business’ particular commercial segment. Moreover, they are able to pre-screen buyers to determine if a potential buyer has the financial capability to close the deal.
- Maximizing Buyer Attraction. A business broker assists in creating a marketing strategy to find interested buyers, including an executive summary that highlights the specific attraction of your business, emphasizing uniqueness or a proven track record of profitability. This creates a competitive sell-side process, often with multiple offers, that results in a higher sale price. A broker can educate buyers on the attractiveness of your business by presenting a business model that a buyer can use to scale the business, you can maximize the value received.
- Obtaining a Certified Business Valuation. A broker can help you obtain a certified business valuation. Buyers prefer certified business valuations, because the process is unbiased and reflects a company’s true worth. The broker can negotiate the sale price using the appraisal and other factors that impact company value, with the goal of ensuing that the seller receive the best price.
If you are ready to sell your business (or beginning to consider it), give the business lawyers at Fournier Legal Services, LLC a call to start the process at 860.670.3535 or email sdontigney@jeflegal.com! We have a slew of trusted professionals in our network we can make available to you to streamline the process while maximizing the value you receive.
Joseph E. Fournier is an Attorney and a CPA who has more than twenty years of experience in a variety of business legal matters, including start-ups and company formations, drafting shareholder and operating agreements, contracts, employment law, commercial litigation, tax planning and audit defense, and mergers and acquisitions (M&A). He also handles estate planning matters, such as business succession planning, wills, trusts, and probate.