15 Feb Professional Representation Vs Self Representation: 6 Things to Consider
Debating on whether to represent yourself or hire a professional for your business sale?
You are not alone…
There are a number of business owners that believe they can handle a business sale themselves, without an intermediary. Many of our previous clients are business owners that sold or tried to sell their current or previous business without an intermediary– They can tell you that the business sale process can be overwhelming, a series of complex events, and that they truly never knew whether they were doing the right thing to ensure a successful outcome.
Some owners successfully sold their business and others were left frustrated and feeling that they had “exposed” their business in a failed transaction. At the end of the process, whether successful or not, many questioned if some of the key decisions in the process were handled properly.
“I know that if The Stansberry Firm is representing the seller in an acquisition, we [the acquirer] will end up paying more.”
-Quote from an acquisitions executive with a well known and active acquirer
In deciding whether or not to use an intermediary, here are 6 things to consider:
1. Knowledge and experience: The buyer of your business may well be a large corporation, an investor or private equity group. These types of buyers have extensive experience in structuring a deal to their advantage. Sometimes the smallest of details can mean a substantial difference in the net proceeds to you as the seller: It’s not just the price, but the terms of the transaction that can make this difference. The Stansberry Firm’s extensive transaction experience assures not only that you get the best price for your business but also the best structure to assure maximum net proceeds.
2. You need to focus on your business, not the business sale. Selling your business will likely take months, not days or weeks. The most critical time in preserving the value of your business is from the day you make the decision to sell until the day the transaction closes. If you are spending hours each day fielding calls and requests from potential buyers and not focusing on the day-to-day operations of your business, revenues and cash flow can suffer. To the extent your business declines due to your lack of focus, the ultimate sale price of your business is likely to suffer and even the interest level of potential acquirers.
3. We assure that your business is presented to the buyer in the best possible manner. First impressions are lasting; they can determine whether an acquirer is interested in the business or not and, it can set the tone for the buyer’s valuation. Every business has strengths, challenges and opportunities. We work with you as the business owner to fully understand the unique characteristics of your business, both operationally and financially, so they are presented to potential buyers in the most positive light.
4. We can find a buyer that you might not have otherwise found. We have extensive relationships and a database that includes local and regional strategic buyers (those who are already in the industry or closely aligned with your industry) as well as financial buyers such as private equity firms and private investors.
5. Our Fees are “Self Funding.” We add value to the transaction. That means net dollars to you over and beyond our fee. We have had acquirers frankly state to us that our involvement in the transaction means they will pay more for the business than if the business owner sold on their own.
6. We serve as a “buffer” between the buyer and the seller. The business acquisition process can be an emotional one for both buyers and sellers of businesses. Often during the process, conflict may arise. The Stansberry Firm’s role is the help take the emotions out of the process and preserve the relationship between buyer and seller; a relationship that often needs to endure a number of years, especially if there is an ongoing tenant/landlord relationship, employment relationships and other financial matters.
Likely, your business is the largest, most valuable asset you own; making the decision to sell your company is a life changing event and, we understand that from personal experience in making the same decision ourselves.
If you are considering selling your business, contact us to discuss your individual needs in a free, confidential consultation. We are happy to take a look at your company and give an honest opinion of what a potential transaction would look like in today’s market.