When you’ve decided it’s time to sell your business, you might be undecided as to whether you should hire a specialized intermediary or try to sell your company yourself. As professional business brokers specializing in the manufacturing sector since 1994, we cannot emphasize enough how important it is to work with an M&A specialist. Here’s why.
An M&A Specialist Will Streamline the Process
Most business owners only ever sell one business in their career. And since so much goes into putting together a good deal, the whole process can be extremely confusing and even overwhelming. Yet it’s important to not overlook any aspects — or you could find yourself losing out.
A broker specializes in selling businesses, so he or she can streamline the entire process, from valuing your company to marketing it to potential buyers, as Inc. points out. Furthermore, if you choose an M&A expert who focuses only on manufacturing, you’ll benefit from his or her expertise in this sector.
Knows How to Accurately Value Your Business
Determining the value of your business involves more than simply estimating your assets and current revenue. It also involves projecting your future earnings for a number of years —a complicated process that takes earnings multiples, a discounted cash-flow analysis and business trends into account, according to The Hartford.
And since it’s critical that you price your company right, you absolutely need the assistance of a specialized broker with expertise in your sector. Otherwise, you could be losing out on hundreds of thousands or even millions of dollars.
Has the Necessary Contacts
It can be challenging to go about marketing your business while ensuring your employees, clients and competitors don’t find out. However, an experienced M&A specialist will know qualified buyers that he or she can present your business to without having to advertise it in a manner that could compromise your confidentiality.
Entrepreneur notes that any broker claiming to have a large number of buyers is questionable, because it takes a lot of time to build up relationships with interested parties who can realistically make you an offer. An M&A specialist with proven experience in your sector is a much better choice and can save you time while getting you a better price.
Frees You Up to Concentrate on Day to Day Operations
Selling your business can take as long as 18 months — sometimes even longer. And during this time, you need the energy and time to ensure your company keeps running smoothly. Just think about it: Your asking price is based on current revenues and projected earnings, amongst other things. That means that you need to make good on those factors in order to substantiate your asking price.
If you’re too busy with the sales process to properly run your company, your earnings are likely to suffer — and that will most likely impact any offers you receive. In fact, it could even impact an existing offer and lead a potential buyer to doubt whether or not your business can survive without you. When you work with an M&A specialist, he or she does the heavy lifting on the sale so you can keep concentrating on the day to day operations and safeguard your earnings.
An M&A Specialist Functions as a Buffer
During the sales process, challenging situations can arise in which you don’t see eye to eye with a potential buyer. After all, you’re trying to sell the company you’ve invested years of your life in — and that’s not always easy.
For example, perhaps you want to ensure your workforce is retained while the buyer wants to bring in new people. Or maybe you don’t agree with the buyer’s valuation of an asset. Yet while you can’t let your emotions rule your decisions, a potential buyer also has to be sensitive to your situation in order to keep communications open.
Unfortunately, this isn’t always the case, since buyers typically look at an acquisition as a strategic move that’s purely financially motivated. Forbes advises that when issues arise, an M&A specialist can act as a buffer between the parties. This can help prevent situations from escalating and the sale being jeopardized.
Get the Best Deal on Your Business
In short, although an M&A specialist typically will be paid a commission for his or her services, he or she also has the expertise, contacts and time to get you the best deal on your business. Moreover, during the sales process, you’re free to concentrate on running your company so you continue to bring in the profits you need without becoming overly stressed or worse — suffering from burnout.
Just make sure that whomever you choose is a member of the International Business Brokers Association — or IBBA.org for smaller manufacturing businesses or M&A Source – MASource.org for lower middle market businesses. That way, you can be assured that the M&A specialist you select to help you adheres to ethical business practices and is qualified to do a good job for you.