Ready to sell your business?
Great. Now what?
The M&A Source is here to help. As "the source" for all things involving lower-middle market intermediaries, the page contains information to help you make a decision on whether you want to work with an intermediary or sell your business alone.
Why Should I hire an Intermediary?
Selling a business of any size- no matter how seemingly straightforward - requires hours and hours of meetings, discussions, phone calls, negotiations, reviewing documents laden with "legal-ese," and other administrative tasks. Can you spare the time away from your business? Do you WANT to take on a project this big and important to your future?
The key benefits to hiring an intermediary and member of The M&A Source are:
- You can continue to run your business as you always have while the intermediary works in the background to market & sell your business
- Just as a real estate agent acts a buffer between buyer and seller, an intermediary can do this for your business sale as well
- Intermediaries have extensive experience in the documentation, which insures they can adequately handle not only the flow of paperwork, but complete everything completely and properly the first time
- Education and Experience!
- Intermediaries have experience in different types of sales - from straightforward to complicated.
- M&A Source members have access to top notch education on a variety of topics. This ensures they are always up-to-date on new rules & regulations, as well as best practices.
- Many M&A Source members hold elite designations - such as the M&AMI and CM&AP.
If you decide to work with an intermediary:
- Get referrals from your network or use our member directory to find someone in your local area.
- Some intermediaries specialize in certain types of businesses; while others are more generalists. Ask questions to make sure the intermediary you're working with is a good fit for your business.
- Consider calling & interviewing several intermediaries in your area to see who is the best fit for both you & your business.
- Intermediaries are typically paid a commission on the final sale price, averaging approximately 10-12%. Make sure you understand the fees before engaging with an intermediary. And know that while this commission may seem high, intermediaries also assist you throughout the entire process.
- Ask for client references before getting started.
- Ask how the intermediary will market your business. Do they have access to a database of buyers? Do they attend the Dealmakers Expo to meet with Private Equity Groups? Put up ads on the Internet? Share listings with other intermediaries in the area?
- Find out if your state requires intermediaries to be licensed (either real estate or otherwise).
- Do they belong to any processional associations, such as The M&A Source, or hold any designations such as the M&AMI or CM&AP?
Selling It on Your Own
You can also try to sell your business on your own. Many people have successfully done so. However, understand that it is a long road with many meetings and discussions with attorneys, accountants, and others. Make sure you fully understand how to handle all aspects of selling your business; and have the time to do so. And if you do go it alone, you may still end up working with the buyer's intermediary and their team.
The M&A Source recommends that you use our membership directory to find some intermediaries near you. Also, feel free to review our other resources to learn more about the pitfalls and best practices in selling a business. You may also want to consider joining The M&A Source to get access to our webinar library that covers topics ranging from what to do after the sale, to mezzanine financing, to understanding tax returns.
As you make your decision, please also ask yourself the following:
- Do you really have the time to do this?
- Will working to sell the business take time away from running it? How will you handle this?
- Are you willing to invest in tools to help package your business for sale the best way possible?
- Do you already have an attorney you trust to help you through the process?
- Can you afford to pay all involved parties separately before the sale, or would you prefer to just pay the intermediary from the profit on selling your business?
- Are you ready to make LOTS of decisions on your own? Do you feel comfortable with that?
- Do you have any potential buyers in mind? If not, how will you find buyers?
If you're not sure where to start, pick up the phone and call an intermediary to get the process started. This will also help you wrap your head around all of the steps & paperwork required. If you decide to sell it yourself, feel free to use our publicly available resources on this site. If you decide to use an intermediary, find a reliable M&A Source member & intermediary here.