As a business owner, you make decisions big and small every day. The biggest and most daunting decision you may ever make is whether to sell your business. With so much on the line, an undertaking of this magnitude can be overwhelming, and many business owners don’t even know where to start.
To find the best buyer for your business, you need to reach as many qualified purchasers as possible. Engaging an experienced mergers and acquisitions (“M&A”) advisor to create a market for your company through a competitive process can help optimize the sale of your business. This exercise takes a lot of time, effort, and expertise, and the assistance of an advisor can help make the process much easier to navigate.
Selling your business can take months to years and takes daily attention to find the right buyer, and you still need to run your business. Hiring a skilled sell-side advisor means you can keep an eye on essential operations rather than marketing your business to potential buyers. An experienced advisor helps you avoid mishaps and guide you through the identification, negotiation, due diligence, and closing phases of a sale.
Top Reasons to Hire a Sell-Side Advisor to Sell Your Business
1. Sell-side advisors help bring in buyers
You’ve been in business for a while. All the networking and contacts you’ve made over the years may have led you to a couple of promising potential buyers. However, when it comes to selling, more options are always better. An advisor brings with them a large network of potential buyers to connect to your business. Additionally, their knowledge of the landscape means a solid marketing strategy can be established to target additional buyers for your organization.
Many business owners have concerns about the well-being of their business and employees post-transaction. Access to multiple buyers allows sellers to select the suitor they feel most comfortable selling their business to, in addition to ensuring the best price.
2. Advisors help you overcome transaction obstacles
M&A delays are often caused by obstacles buyers and sellers face during the transaction process. For example, global or U.S. market uncertainty, pending legislation delays, or mistakes made during the negotiation process can all become barriers that slow down the selling process. Self-represented business owners can easily become overwhelmed and most lack the experience to overcome these potential obstacles. Experienced M&A advisors have navigated these challenges before and will help you overcome these barriers successfully.
3. Advisors can negotiate a better deal
Knowing your asking price and conducting a thorough business valuation isn’t enough to negotiate a great deal. With a sell-side advisory firm, you get a well-developed plan. Your advisor thoroughly examines your business from all angles, gauges market trends and buyer interest, and will help you negotiate the best price.
4. Advisors speed up the selling process
Time is money and the value of time is critical, especially for business owners. Your business takes longer to sell if you’re bogged down with paperwork and confusion. Sell-side advisors help you to work out the kinks and seal a sale in less time than if you were to try and tackle the process alone. Plus, you’ll gain a valuable understanding of the process without wasting your time researching details. An advisor does all the legwork for you.
5. Advisors help eliminate uncertainty
Selling a business is like other major life transactions. If you settle for a bad deal, you’ll end up wondering what would have happened if you had entertained multiple offers instead of selling to the first buyer who came along. Without help, your business may have been acquired at a below-market price, or under unfavorable terms, by a buyer who sees it as an under-valued opportunity. The assistance of an advisor helps ease your worries about the “what ifs.”
6. Advisors provide a safety net
What happens if a buyer backs out of a transaction during the due diligence phase or tries to renegotiate the purchase price? When problems that lead to such issues can’t be resolved, revisiting previously interested buyers is a better alternative than starting from scratch. You need a safety net. Your advisor may be able to salvage your sale by re-engaging other interested parties.
Selling a business isn’t easy. It’s time-consuming, confusing, and can lead to many obstacles and questions along the way. You worked hard to make your business what it is today, so when it’s time to sell, you should get no less than the best deal from the best possible buyer. BuySell-side advisors help to ensure the best possible deal is negotiated — and can help mitigate the confusion, stress, and uncertainty out of a sale.
Michael Callam is president of Gertsburg Licata’s Talent and M&A advisory groups. He can be reached at [email protected] or (216) 573-6000 x7003.
Gertsburg Licata is a full-service, strategic growth advisory firm focusing on business transactions and litigation, M&A, and executive talent solutions for start-up and middle-market enterprises. It is also the home of CoverMySix®, a unique, anti-litigation audit developed specifically for growing and middle-market companies.
