Sell Your Business with
Business Brokers You Can Trust
So, you you’ve decided you want to sell the business. It can’t be that difficult to sell a business, right. You’ve likely bought and sold things of great value throughout your life. You may even be a solid negotiator and a world-class salesperson. Do you really need a business broker to help you sell a business?
The short answer is: no. You do not NEED a business broker to get your company sold. By all means, you could put your business up for sale, find a buyer, negotiate terms and close the deal on your own. While this may be true, you are much more likely to sell a company AND achieve your exit goals if you use a broker.
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Selling a business is difficult. There is no one-size-fits-all formula for business valuation and limited data on private business sales. Each company is unique. Employees and roles will vary. Customers relationships differ from company to company. Owners will have a wide range of roles and degrees of importance in the business. All of these things will make selling a business difficult. No one should try to sell a business on their own.
Your business is (likely) your biggest asset
As a business owner, you know how much blood, sweat, and tears went into building your company. You continuously re-invested your profits to grow your business. While most Americans stocked away money into retirement plans, you bought new equipment instead. Your business IS your retirement plan.
Despite its importance to the owner’s balance sheet, 83% of owners have no written transition plan. Today’s owners put more thought into their next vacation than they do how they will exit the business. With mindful planning ahead of time, a business owner can dramatically increase business value. Business value needs to be seen as what an owner walks away with after taxes, fees, and interest.
If you look at most business owner balance sheets, the largest single line will likely be the business. It may account for 50% or more of a business owner’s net worth. The retirement and post-sale lifestyle depend greatly on how much an owner walks away from the company with. A business broker needs to understand this and help plan the sale and exit with foresight.
It is a unique process to sell a business
Selling a business is nothing like selling a car or real estate. You can’t (successfully) sell the business by putting a sign in a yard or window. No other process is like the process of selling a business. Your lack of understanding the business sale process, a seller can quickly scare away business buyers. If you approach selling the way you would real estate, you also risk collateral damage to the company.
Unlike publicly traded companies, ownership in privately held businesses is illiquid. Ownership interest is not easily converted to cash. A typical, well executed sale should take 6 to 12 months to complete. Selling is a multi-step process where missing a single step will create hurdles to selling. A poorly executed sale will likely fall apart causing frustration and wasted time.
You only want qualified buyers to know that you are selling the company. To find qualified buyers, you need to know where to look. When you find them, certain precautions need to be taken to protect the business. You need to speak their language of business buyers. You need to know what documents they will request so they are prepared ahead of time. The release of information should be done in a way that protects the business and the owner.
Not all business brokers in Colorado are the same
The unfortunate truth of our industry, is that business brokers are not always seen in the most positive light. We’ve heard horror stories from both buyers and sellers about Colorado business brokers not acting professionally. At Exit Brokers, our mission is to change public perception of the Denver business broker industry.
Many brokers in Denver will list any business that comes their way. We will not. We believe in giving business owners the honest feedback they need to help them achieve their desired outcomes. Sometimes that means turning down a listing so a business owner can fix a few things with the company to make it more ‘attractive’. The result: our ExitReady Sales Process allows us to sell 4 out of 5 businesses that we list for sale.
Can the ExitReady Process increases the odds I'll sell my business?
Over thousands of one-on-one discussions with business buyers, we know what will make or break a deal. We have an in-depth understanding of what buyers are looking for in a business. Extensive knowledge has shown us what will send them running for the hills. Our mock due diligence process helps identify and resolve potential issues before taking the company to market.
By looking at a business through the lens of a buyer, it helps identify any potential roadblocks. If we know the roadblocks, we can be proactive in addressing them. By doing this, we dramatically decrease the time needed to sell a business. We are able to uncover the potential deal killers that would have wasted months of valuable time.
The right process also helps set realistic expectations for the owner. 95% of mergers and acquisition advisors believe an owner’s unrealistic expectations is the biggest obstacle to a sale or transfer. It is crucial that an owner has realistic expectations of value ahead of time. If they do, it is much more likely the company will sell. The business sale is also more likely to align with exit goals.
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When you sell the business, business broker selection is a crucial decision
Who you choose to help sell the business is one of the most important financial decisions in your life. It can mean the difference between a seven-figure payday and having to shut down or liquidate your company. Only 1 in 5 businesses successfully transfer to a new owner. The other 4 businesses have to find alternative solutions like giving away the business or shutting it down.
If you’d like to learn more or have a discussion with one of our business sale advisors, contact us or call us at (720) 598-8195.