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4121 S. Fremont Avenue, Suite 112 Springfield, MO 65804 Phone: (417) 581-8887 Fax: (888) 765-8633 Email This Office

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Selling their business is one of the most momentous events in the life of a business owner. The net proceeds from the sale and the amount of protection provided to the seller during the selling process can in large part determine the quality of the rest of their life.


Every business owner realizes that, when it is time for an ownership transfer, they only have one chance to get it right. For that reason, it is wise to hire a professional team to handle the details of the sale: 
  • An attorney experienced in business sale transactions;

  • A competent accountant to assist with the details of deal structure and due diligence;  
      
  • A financial planner or wealth manager to assist with the investment of the proceeds from the sale;  
     
  • A professional business intermediary to market the business to the largest possible pool of buyers, in order to receive the highest possible price and best possible terms for the seller, while helping ensure that employees and customers and competitors and suppliers and lenders do not learn of the business being for sale.         


More Money at Closing: A business seller will always walk away with more money after the sale by using a business intermediary, also called a business broker or investment banker, for these reasons: 

  1. They have the tools and resources to reach many more interested buyers than could the seller on their own.

  2. They are knowledgeable about all the possible structures of business sales, and their tax implications.

  3. They are skilled at negotiating favorable terms of a business sale, including the all-important asset allocations.

  4. They are experts at managing the selling process and coordinating the efforts of the other team members to accomplish the goal of a timely sale with the best possible price and terms for the seller.
Consider this example: An owner selling a business on their own could sell it for perhaps $500,000. But if they had hired a professional business intermediary who got them $600,000 for their business, they would still have walked away with substantially more money in their pocket, even after paying the broker’s success fee. And the broker would probably have helped save the seller some money in the structure of the deal and in the resulting tax consequences as well.   

According to Michelle Seiler-Tucker in her book Sell Your Business for More Than It's Worth, an experienced business broker can and should be able to sell a business for 20-40 percent more than the business owner could on their own.



A well-trained, competent business intermediary will:

  • Help maintain confidentiality throughout the process. Even prospective buyers can lose interest if they discover confidentiality has been breached.

  • Value the business properly, to determine a price that can be justified and supported to buyers and lenders. Every business has its own unique value drivers, which affect its value. Business intermediaries have valuation methods and access to business transaction databases which can help determine a particular business’ most probable selling price with precision. However, the best way to ensure that a business is sold for its maximum value is to have several financially qualified parties bidding on the purchase of the business, which can much more likely be achieved by a business intermediary.

  • Provide the necessary financial analyses to present an accurate, complete picture of all the benefits of owning the business. The seller’s accountant’s job has been to show the least amount of profitability possible on the financials, to reduce taxes. The business intermediary’s job is to show the maximum amount of actual owner benefit the business has been providing the seller, in order to increase the sales price.

  • Help the seller position the business and its financial records and assets and operations to make it more attractive to buyers and lenders.

  • Market the business confidentially to the broadest possible number of buyers.

  • Develop a professional Confidential Business Review to present to buyers, their advisors, and to lenders, which presents the business in the most appropriate way to maximize the sales price.

  • Screen the hundreds of buyers that typically respond to the broad, confidential advertising campaign placed and paid for by the business intermediary, and obtain their legally-bound agreement to not disclose the fact that the business is for sale.

  • Level the playing field for the seller. Many corporate buyers have acquired multiple businesses, while a seller often sells only one business in their lifetime. A business intermediary can help ensure the seller is not taken advantage of.

  • Assist the seller in organizing the information buyers and lenders will require when they are evaluating the business.

  • Schedule all buyer conference calls, meetings with the seller, site visits, and meetings with the buyer’s and seller’s attorneys and accountants.

  • Present offers to the seller and assists in developing counter-offer strategies.

  • Be a buffer between buyer and seller. They need to be on good terms after the closing. Manage the due diligence process to a successful completion, rather than having the process cause the buyer to withdraw from the transaction. Assist the buyer in surmounting all the hurdles necessary in order to obtain financing.

  • Oversee and expedite the activities of the attorneys, accountants, and lenders, while putting out all the fires that occur with agonizing frequency along the way to a closing. There is a saying that ‘all deals die three times before they close’. All business intermediaries would swear to its truth.

  • Track the contingency removal process to ensure it proceeds in an orderly fashion.

  • Manage the closing so that it occurs timely, safely, and with no surprises. The faster the sale concludes, the less risk there is of employee problems, damage by competitors, or customer defection.

  • Monitor and assist with the post-closing processes and agreements.
The business intermediary performs one more very important functions – they allow the business owner to continue to focus all their attention on managing the business while the business is for sale.

Selling a business is a full-time job. If the business owner tries to perform all the selling tasks themselves, confidentiality is usually lost, and the business can suffer at a time when it needs to be operating at its absolute maximum potential. Nothing extinguishes a buyer’s flame of interest more than learning that the business has not been doing as well recently as in the past.

Selling a business is a difficult, risky, complicated undertaking, with lots of potential pitfalls. Engaging a professional team to guide the business seller through the process will be one of the best business decisions they ever make.                    
  • (417) 581-8887
  • 4121 S. Fremont Avenue, Suite 112 Springfield, MO 65804

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