Here are 5 key issues that most business brokers do not even consider
If you are considering selling your business, please understand the reality. Any business broker who represents both the buyer and the seller in a deal has only one thing in mind: Getting the deal done as quickly as possible and getting paid. I am a sell side broker with over 40 years of experience. While we certainly get many deals done, our top priority is the overall satisfaction of the seller.
While I am flattered that some of the new business brokers who are now on the scene are following my lead and thinking about positioning an operator to maximize their selling price, don't expect too much from them. In fact, there are 5 key issues that operators need to be thinking about as they explore the sale of their business. These are issues that new, inexperienced business brokers have not even considered. After all, when your top priority is just "get the deal done and move on," there is little time to consider much beyond the sales commission.
A shortage of experience and patience
Am I worried about sharing these 5 issues with newcomer brokers? Absolutely not. Along with their lack of experience, brokers that work on both sides of the table have little patience or care to support the buyer or the seller. For the broker that works on both sides, one party is going to get the short end of the deal - it's either the buyer or the seller, but usually it is the seller. To these brokers, the seller's well-being is not important.
Here are the 5 key issues that most business brokers do not even consider - but these are issues that we think about, talk about and work through with our clients - who are sellers ONLY.
1 - Assemble your "deal team" - Make sure your CPA and your attorney have M&A experience. Have them prepare a pre-deal checklist. Consider different sales structures (stock sale or asset sale) plus wealth transfer and tax mitigation strategies. VBB Advisors will work closely with your team to address these issues. Our M&A experience is helpful here.
2 - Get yourself an experienced wealth manager - Usually, your CPA can help make a recommendation. “Do it yourself” wealth management is a bad idea, but talk to more than one - compare fees, check references and ask your wealth manager an important question: Based on my cash flow needs, can I live comfortably off of the proceeds of the sale and the expected investment return. Prepare to get yourself a big personal umbrella policy. You will now have serious assets that need protection.
3 - Consider the impact on family members - especially those who are involved in the business. Your business is often a big part of your identity. When the business is sold, how will everyone cope with that change? How will you cope with it? To what extent will you protect the jobs held by your son, your nephew and your brother-in-law, all of whom depend on your business. We can build those protections in to the deal.
4 - How badly will you miss the perks? - While the selling price might look great, many sellers say the thing they really feel is the loss of the business credit card, the car leases and registration paid by the company and the insurance (including health) that was paid by the company. All of this must be considered as the selling price is determined. That is why we plan - prepare and make sure you get the deal you need - ideally, from one of multiple bidders.
5 - Prepare for the next chapter - I know one operator who plans to become a cabinet maker in his retirement. Some operators are just serial entrepreneurs and they need a new business to buy. Some simply get the best set of golf clubs they can find or the best fly-fishing gear available and settle in to enjoy life. Your next chapter should be considered long before the sale occurs, for your own well-being.
Here is the key point:
We are a business broker that represents sellers exclusively. We deal with some very sophisticated sellers and some who are 100% dependent on our guidance and advice. We welcome the opportunity to serve all sellers and we are committed to use our experience and our patient, thoughtful approach to make absolutely sure that your deal, probably the most important deal of your life, goes smoothly and leaves you in a position to enjoy your next chapter, whatever you decide is right for you.
Take that critical first step. That is often the toughest one to take.
Order my free 2025 Exit Strategy Planner. At the very least, it will provoke some thought, and this is a good time to think about your future.
Whatever your reasons are to sell your company - the timing, a sense of frustration, the desire to enjoy life or an interest in rewarding yourself for years of hardwork – VBB Advisors can help you realize your goals.
I am Mike Kelner, the leading sell sideintermediary in the convenience services industry. Let’s sit down and have a conversation. Use this appointment scheduler to set up a meeting with me.
Or – give me a call at 704-942-4621
