Every business owner will inevitably reach a point where they must consider selling their business or plan for its succession. Engaging with an intermediary offers a streamlined approach to kickstarting this process while also learning what pitfalls to avoid. Whether it’s a business broker or M&A advisor, the expertise of a qualified intermediary can produce a higher rate of success while reducing the stress of the sale.

Collaboration is Key

It’s crucial to understand that selling a business is a collaborative endeavor. Sellers should not try to handle everything alone. Most business sellers don’t have the experience necessary; they will sell only one business in their lifetime. An intermediary, like a business broker, sells several businesses each year and can navigate through any surprises or circumstances, thereby preventing costly errors.

Selling a business successfully hinges on close cooperation and effective communication between the seller, intermediary, and other stakeholders like executives and advisors. It is especially important to use full disclosure with your intermediary. They will be managing the sale process for you and keeping them in the know will prevent delays or unexpected turns that could derail a deal.

Expect a Lengthy Journey

Selling a business can be a prolonged process with a lot of ups and downs. While typically spanning six months to a year, it can go on further. This doesn’t include the preparation process which can often take even longer. Sellers should anticipate working closely with their chosen intermediary for an extended period of time, especially while preparing to list the business. Keeping your business broker informed about business developments throughout this period is also crucial for a successful outcome.

Embrace New Perspectives

Working with an intermediary provides you with an objective perspective from someone who isn’t emotionally attached to the business. Acknowledging the invaluable experience of the intermediary and their unique viewpoint is paramount to preparing to sell your company and make adjustments along the way. While you don’t have to blindly adhere to every one of their suggestions, it is important to defer to their expertise and be open to their recommendations.

Duties of an Intermediary

Intermediaries bring years of experience in selling businesses like yours, making their insights invaluable. They may propose targeting specific buyer types or suggest modifications to enhance the business’s appeal. They also have extensive lists of leads and connections that help to market your company and reach far more potential buyers than you could on your own. Business brokers are experts in confidential marketing as well. They can keep the identity of your business private and safeguard sensitive information through blind marketing. This allows you to protect your business from competitors and excessive inquiries about the sale. Your intermediary will only share the identity of the business and financial information to buyers who are well-vetted and financially qualified.

An intermediary is your advocate, who can help you make decisions based on your professional and financial goals. They act as a buffer between you and the buyer, handling some of the more challenging parts of the sale, such as negotiating deal terms and the sale price. They manage the due diligence process and ensure that documents and information are relayed in a timely manner, keeping the momentum of the deal going. This allows you to run your business, without having to spread yourself thin by also managing the sale process.

Financial Benefit of Hiring an Intermediary

While intermediaries are paid on commission, their involvement helps sellers realize profit potential that would otherwise be left on the table. Brokers and M&A advisors use business valuations to help sellers understand what their business is worth on the open market. This takes into account your company’s assets, other tangible and intangible factors, cash flow, market conditions and competitive landscape, to name a few. They know what to focus on to help your business stand out and provide expert feedback on how you can boost the value of your business and sell it for as much as possible.

Business owners who try to sell on their own often end up selling their companies for much less than similar ones sold with the assistance of a broker. Sellers often get anxious about the business taking too long to sell, are unable to reach enough buyers, get taken advantage of by a more knowledgeable investor, damaged by a competitor or choose to work with only one buyer. An experienced intermediary can navigate all these potential issues and price your business appropriately, so that it doesn’t sit on the market for too long and you don’t leave money on the table.

Preparing a business for sale requires dedication, effort, and planning. For many people their business is both their biggest financial asset and their way of life. With all the time and effort you put into growing and running your company, you would want the best possible result from the sale. Working with a business broker or M&A advisor early sets the stage for navigating towards eventual success.

At Corporate Investment Business Brokers (CIBB), we work with sellers, sometimes years in advance of listing their business for sale. This helps them to properly prepare for appealing to as many buyers as possible and reaching their maximum profit potential. We are headquartered in Sarasota and Fort Myers and have been serving business owners and entrepreneurs in the entire Southwest Florida region since 1986. Contact us to get a free, no obligation, business valuation estimate to discover what your business is worth and figure out your next steps.

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