Use an Intermediary. The business sale process is probably very different from any sale process that you have attempted. Plus, it’s a once-in-a-lifetime occurrence. An experienced and successful consultant will represent the owners and the owners only. Sellers who represent themselves almost always leave money on the table as they have not prepared the business’ financials in the manner that promotes their business, something that very successful business broker adviser’s have a knack for recasting. This is expensive money to save. The experienced intermediary who has traveled this road many times will know well-qualified advisers to recommend as needed (e.g. accountant, attorney). This consultant will provide an almost limitless list of potential buyers that should be reviewed with the owners for their approval before any contact, confidentiality agreements for execution by potential buyers, a thorough and clear offering memorandum that presents a business in a manner that promotes it, provide financial data in a clear industry standard manner, and shepherd the process along to ultimately find the mutually beneficial buyer to acquire the company under terms to the satisfaction of the owners.
During the sale process continue to focus on the operations of the business, even if overburdened by the due diligence requests. If a business begins to lose its positive financial trends the seller is understandably worried and worries that this could be more than a temporary aberration. The value of a business is greatly affected by its perceive immediate and long-term future. Nothing increases the value like financial success.
Be prepared for a very detailed and beyond thorough due diligence. It is often stressful so hunker down and take a deep breath. It’s not fun and often beyond reasonable but it is unavoidable. The best advise is to keep a list and a copy of what was provided so when it is again requested it can be easily located. Remember, there is a pot of gold awaiting you, so hang in there.
“Selling a business is a once-in-a-lifetime and lifestyle change that often affects multiple generations. So, use a specialist with years of experience. While this can be done by the business owner in an attempt to be frugal, our 25 years with this specific focus tells us that often the owner is reducing the sale price in multiples over the money saved from not paying a success-based consulting fee.”, says Emmett Barnes, President and Founder of The Montana Group.