Professionals to Hire to Sell Your Business
Selling your business is a big decision that will affect your entire life. You want the best possible outcome of your business sale, but you don’t want to spend the proceeds paying professionals unless they add value to the transaction.
At BizBuySell, we have built the largest business for sale marketplace, and a platform that empowers owners to take on the task without the added cost of broker fees and other professional services. But don’t underestimate the challenge of successfully selling a business. Closing the sale of your business will require meticulous planning, effective marketing, nuanced negotiations, and preparation of specific financial and legal documents.
One of the first decisions you must make is who you want on your sales team. Your decision will likely vary depending on the complexity and value of your business, and the amount of time you are willing to devote to the sale.
You may be considering an accountant, an attorney, or an entire team of appraisers, brokers, and business consultants. To find the right pros, first understand how each of these particular roles fits into the business selling process:
Will you need an attorney?
If you hire no one else, hire an experienced attorney. Lawyers with experience in business transactions generally work on a flat fee basis, and will efficiently review incoming offers and LOIs, prepare standard contracts like NDAs and buy/sell agreements, and offer advice for legal issues that pop up along the way.
If you choose to handle everything else yourself, leave the legal work to the lawyers.
Will you need an accountant?
If you don’t already have one, you may need to hire an accountant to clean up your books. The value of your business is based on its past performance, and buyers will scrutinize the past few years of your financial statements to justify or dispute your asking price.
Will you need a professional appraiser?
Any business that involves property, brands, proprietary processes, or assets will require some type of valuation expert. Many business brokers also act as appraisers, and if this is the case, then a specialized appraiser may not be necessary.
Depending on the size of your business, you may not need a professional appraisal. You can use our valuation tools to get a ballpark based on your cashflow and an appropriate industry multiple. Then you and your broker (should you choose to hire one) can make adjustments based on the specifics of your business, the general trends in the marketplace, and volume of offers you receive.
Will you need to hire business consultants?
A competent consulting firm may help you get a significantly higher selling price by suggesting you implement a variety of pre-sale business improvements. If you stand to significantly improve the value of your business, and you have the timeline to do it, the extra fees for the service may be well worth it.
The main decision. Should you hire a business broker?
For those with limited experience in selling a business, an experienced business broker is the best professional to hire to navigate the process. They are also helpful for owners who have experience selling, but who prefer to spend their time and efforts on the day-to-day operation of their business.
A good business broker is not cheap, with typical success fees of 10-15% of the selling price. However, for all but the smallest business transactions, they generally pay for themselves by maximizing the final sales price.
The Main Benefits of Hiring a Broker
- Brokers are very well informed on valuation and pricing trends in your local market and can help you set the right selling price.
- A broker can focus on the sale, as you focus on business performance to maximize the value you get.
- They can be a bridge - or buffer - between you and the buyer.
- Brokers can handle the legal aspects of the sale and financial documentation, so you may save on legal fees.
- A broker can take care of unexpected challenges that may arise.
A broker can be especially beneficial for hard-to-price businesses by providing nuanced guidance on the local market to help determine the value of your business, as well as the associated asking price. Just be sure your broker has the necessary experience, network, and track record.
How to Find the Right Broker
See BizBuySell’s Broker Directory, or get referrals from business associates, your attorney, or your CPA.
- Make sure the broker you're considering handles business sales (as opposed to real estate sales).
- Learn the different types of business brokers and determine whether you need a mergers-and-acquisitions specialist (for a multi-million dollar corporation) or a main street business broker (for smaller businesses).
- Meet with and interview a few brokers to ensure a reasonable fit. Ask whether they've worked before with businesses like yours. You may need to interview several brokers before finding the right one.
- Discuss their experience and how long they've been in business. Get proof of their certification and ask to see their annual sales records. Find out if they are part of a group or a solo practitioner. Ask how they intend to market your business.
- Clarify upfront the relationship you'll have with your broker. Do you need them to operate in a fiduciary or transitional capacity?
(For more on brokers, see the articles we have listed under Working with a Business Broker).
Confidentiality is Key
Your business must still run as a well-oiled machine during sale preparation, and throughout the process of handing over the reins. Customers, staff, and especially prospective buyers may spook easily when too much information about the sale of a business is released.
If you choose to hire a broker, he or she will set up blind listings to market the sale and use NDAs to share details with prospective buyers. If you market the business yourself, get your lawyer to prepare an NDA to include in your business listing.
If you haven’t already, join BizBuySell and set up regular alerts to keep track of businesses selling in your industry and area. As you begin the journey of selling your business, you need to become familiar with the market. There’s no better way to do that than to keep tabs on what other, similar businesses are selling for.