What Services do Business Brokers and M&A Advisors Provide?
Selling a business is a complex process. As Business Brokers, we help you at every stage, from setting a price to marketing your business, to closing the sale.
In addition to keeping confidentiality, hiring a professional Business Broker allows you to avoid distractions and keep the momentum going as you continue to focus on running your business, as we’re actively qualifying prospective buyers and aggressively marketing your business.
The Code of Ethics for Business Brokers enacted by the Board of Directors of the International Business Brokers Association (IBBA) is a part of the bylaws as a means of establishing uniform ethical practices when providing business brokerage services for clients and customers.
The selling process typically begins with the determination of the most probable selling price based on several factors using a variety of methods (See What is My Business Worth?). We often make recommendations to help enhance the “salability” of the business and increase your net proceeds.
Next is the marketing plan. Proper marketing maintains anonymity and protects you as a seller while increasing contact with the right candidates. We understand the when’s, where’s and how’s of advertising your business while being discreet – which medium, plan, and frequency will work best for your business and market.
We help you objectively evaluate every buyers’ proposal and negotiate favorable terms on your behalf.
There is a saying in the industry that a deal must fall apart several times before it closes. We continually help to support progress in the due diligence process and serve as a close sounding board and help keep emotions in check for both parties. Another name for a Business Broker is a Business Intermediary.
Selling your business should be the largest financial decision you will ever make in your life. Our smaller Main Street brokerage transactions exceed $300,000 and our Lower Middle Market (Mergers & Acquisitions) transactions are as high as $25 Million. If you had a $250,000 legal question, I’m sure you wouldn’t deal with it without the advice of an attorney.
Our immense experience allows us to find the right buyer for your business and maximize your proceeds. The solid network of business partners coupled with our proven marketing strategy and buyer pool helps ensure the success of finding a suitable buyer.
More specifically, here is what is involved in the proper sale of your business:
- Collection of Initial Seller Information and needs analysis
- Description of Selling Process, Broker Investment, and Representation of Seller
- Collection of: P&L Statements (3 years); Balance Sheets (3 years); Federal Tax Returns (3 years); Furniture, Fixtures & Equipment (FFE) List, Lease/Real Estate Summary; Monthly Revenue Statements (12 months); Franchise Agreement (if any)
- Cash Flow & ROI Analysis
- Search WBA and National Database Comps
- Wright Business Advisors (WBA) Broker Opinion of Value
- Approval of the WBA Listing Agreement
- Collection of Corporate or LLC Resolution (if necessary)
- Collection of Company Checklist and Questionnaire and Seller’s Disclosure
- Terms Pre-Qualification / DSCR
- Finalize Selling Price and Terms
- Prepare the Marketing Plan
- Prepare a blind company ad for multiple sites
- Prepare comprehensive Confidential Business Report (CBR)
- Prepare Internet Listing and Submission Plan
- Prepare Direct Mail Campaign, if appropriate
- Prepare Newspaper Advertisement, if appropriate
- Prepare Non-Disclosure Agreements
- Prepare Strategic Partner Confidential Package
- Enter data into CRM and set up Confidential Data Vault
- Collect Confidential Buyer Profile
- Collect Mutual Non-Disclosure Agreement
- Interview Prospects & Pre-Qualify
- Collect Prospect Financial Summary
- Post Qualification
- Conduct preliminary discussions
- Show business
- Prepare Seller for Buyer Meeting
- Follow-up and Initial Due-Diligence
- Assist in Deal Negotiations
- Assist in preparation of draft agreements
- Assist in the drafting of addendums
- Prepare transaction timelines
- Prepare due diligence list
- Assist in negotiation of Seller’s Promissory Note terms etc., if applicable
- Assist with drafting of counteroffers
- Closing Checklist development and contingency sign-off
- Collection of due diligence materials
- Due diligence assistance
- Recommendation of SBA Lenders
- Pre-Qualification of Business and/or Buyer
- Assisting with SBA Lender Representative
- Assist with negotiation of Seller Note, if applicable
- Recommendation of Third-Party Sources, if appropriate
- Drafting instructions to Closing Agent
- Prepare documentation/settlement statements for Closing Agent
- Assist with obtaining franchise approval, if applicable
- Assist with obtaining a lease assignment, if applicable
- Assist with developing an orderly turnover plan
- Assist with the allocation of purchase price
- Negotiate closing agent fees
- Expedite closing agent documentation requirements
- Proof/revise closing documents
- Closing coordination
What will attract buyers to and increase the value of my business?
- Strong systems/management team in place
- Predictable and recurring revenue and cash flow trend
- Consistent financial data
- Scalability (growth potential)
- Larger companies
- Specific industries
- Market power (niche with high barriers to entry)
- High customer satisfaction
- Businesses that are not dependent upon single customers, the employees, the owner, and their suppliers
There are other qualitative factors affecting value such as access to capital, customer concentration, demographics, level of competition, employee stability, geographical distribution, legal issues, location, lease terms, management depth and ability, the strength of assets, some seller financing, stability, systems in place, terms of the sale, tax considerations, etc. Corporate buyers often buy smaller companies (consolidate) to increase market share. Check out my value drivers assessment to see where your business currently stands.
How Should I Prepare for the Sale of my Business?
Being prepared will increase the odds of a fair, equitable, and timely sale, with favorable terms. A well-prepared business involves selling a business when it is on the upswing. However, considering all factors and important value drivers, one cannot emphasize enough how important it is to have good books and records. Buyers and lenders will peruse your financials for the last three years and will want to see the tax returns, income statements, and balance sheets, and these must support the selling price. Also, any other records, such as employee files, customer/supplier lists, contracts in place, business reporting forms, the condition of the assets, the leases etc. If there is real estate involved in the sale, sellers will need to give a copy of any current appraisal (if performed in the last three years), the layout of the building, and property survey.
How do you Ensure Confidentiality in the Sale of my Business?
As business owners and former sellers, we take confidentiality very seriously. We are diligent to keep the privacy of our clients. If you as a seller choose to keep the sale of your business confidential (and most do), we begin with ensuring that buyers are properly screened. Additionally, our agreement with our Seller’s requires all potential buyers to provide information on their general background, a Disclosure of Financial Ability, Confidentiality Agreement, and Acknowledgement of Working Relationship be obtained before disclosing the name and location of the Seller’s Business.