Congratulations! You’ve arrived at the point where your business is valuable enough to sell and you can enjoy some financial rewards for all your hard work! But, wait a minute… Next comes the realization that you will need to engage a professional advisor to help you with the sale, and that this will come at considerable cost. What to do? Do you really want to pay a lot to someone else to sell a business you’ve worked so long and so hard to build?
Unfortunately, there is no way around paying fees for successfully preparing, working, and closing a sale. Although you might be tempted to arm wrestle a potential advisor to get a lower fee, this isn’t the best way to go. A better option is to engage an advisor who can achieve the best deal structure, and with that the highest margin. After all, what business owner wouldn’t happily pay a dollar to get more dollars back? It all comes down to how you view the return on investment.
So what will increase your chances of getting the best outcome?
- A fair price: your business is independently valued ahead of time to ensure buyers offer you a fair price. This valuation is valid and defensible, meaning various factors have been taken into account and the right type of valuation has been applied.
- Proper research: your advisor has looked into your potential buyer(s) to see what kind of deals they’ve done in the past and how successful they have been.
- A Confidential Information Memorandum (CIM): a skillfully written marketing document that properly educates potential buyers about your business and allows you to sell it for its maximum value.
- Finances and other documentation are in order: you want to show the value of your business. This means having your finances reviewed and cleaned up, corporate documentation updated and current, and operations reviewed for strengths and weaknesses.
- Discrete, confidential communications: these will be with strategic buyers in a broad marketplace to allow you to negotiate a deal that fairly compensates ownership with terms and conditions that achieve the majority of your priorities.
- Clarity around next steps: will you continue being involved with the business for a period of time?
- Anticipation of problems: understanding that business negotiations can be complex and having a plan in place to manage any obstacles or problems that may arise.
A skilled and experienced professional M&A advisor like Maxima can offer you all the above and more, including the negotiation of complex legal representations and warrants and the ability to deal with any contentious issues that arise during negotiations so both parties come away feeling they have got what they need to strike the best deal.
Set up a free consultation today and learn how Maxima can help you sell your business for the highest margin. We focus on privately held companies with annual revenues of $3 million to $60 million. We also advise larger public and private companies on buy-side engagements.