When Selecting the Advisor to Sell your Business?

Before Selling Your Business
Common Components to Montana Group’s prior transactions
January 4, 2016
sales process explained
The Montana Group’s Sale Process Explained
March 12, 2016

The spectrum of business intermediary (advisor) is vast. There are those who are members of nationwide networks who can blast a company’s information throughout the country and abroad. There are those who believe the ideal method when locating the potential buyers should be a selection based on their acquisition history, their current acquisition interest, their ability to fund the transaction, and their overall success with their previously acquired businesses. This tier tends to include those that focus on businesses with a value greater than the aforementioned nationwide network model and is the focus of The Montana Group. (www.montanagroup.com)

The relevant questions to help someone determine the advisor most qualified and best fit for a business owner are based on the intermediary’s experience and how a company will be marketed. A review of completed transactions to determine the size range, geographic and industry focus of their completed transactions, an understanding of services offered and fee structure, the duration of their listing agreement and ability to cancel, the makeup and depth of their buyers, and the level of their involvement throughout the sale process will help in the selection. Also, who specifically will be working on the transaction and their experience and qualifications?

The optimal situation would be to obtain a full and fair proposal that assures the remaining employees that their future with the company continues to remain bright. Generally, those employees that are very good will be critical to the business going forward and will be treated very well by the new owner.  Often the buyer will want the seller top remain for a period of 1-5 years with a minority ownership but this is determined by the seller’s preference. The intermediary should further define the potential acquirer based on this preference as most buyers have a preference.

Often the company owner has a few potential buyers within their industry who have made it clear that they have an interest in acquiring that business. It is rarely a situation that does not require a business broker consultant, as the buyer will realize that due to the representation there must also be other interested suitors outside their industry who are difficult to predict and therefore an opportunity to purchase the business below market should not exist. The fee paid to the consultant should be return in multiples if the selected intermediary is successful.

“Selling a business is a once-in-a-lifetime and lifestyle change that often affects multiple generations. So, use an advisor who is a specialist with years of experience. While this can be done by the business owner in an attempt to be frugal, our 25 years of this specific focus tells us that often the owner is reducing the sale price in multiples over the money saved from not paying a consulting fee.”, says Emmett Barnes, President and Founder of The Montana Group.