You’ve worked hard to build your manufacturing business. For years, you’ve put in the hours, the money and the dedication required to keep growing it. And now it’s time for a new chapter in your life — whether that’s starting a new venture or enjoying your retirement. But one question you might be asking yourself at this crucial crossroads is, “should I sell my manufacturing company without a business broker?”
Of course, there are advantages and disadvantages to doing so. In this article, we’ll offer some pointers for you to consider while making this all-important decision.
Regardless of whether you’re selling your company yourself or working with a business broker, you need to plan years in advance. In fact, Forbes advises starting as early as five years before you want the actual transaction to take place. Being able to take your time will enable you to get an objective overview of the value of your business — plus, you’ll be able to take your time when considering offers.
Moreover, when you first start thinking about selling, it’s wise to do your research about business sales in general. There are many business publications like Forbes, Entrepreneur and All Business that feature articles on this topic — and having that knowledge will stand you in good stead, whether you choose to work with a business broker or not.
Benefits of Selling Without a Business Broker
So what exactly are the advantages of selling without an intermediary?
- Your costs will be lower: As the New York Times reports, you won’t have to pay a commission. That means you’ll save approximately 10 percent of the final sale price.
- You’ll retain the ability to control the timeline: You’ll be able to move forward at the pace you feel comfortable with.
- You gain experience: If you’re planning to start another business endeavor, selling your company yourself can be a valuable lesson for the future.
Drawbacks of Selling Without a Broker
However, there are also drawbacks to a DIY sale. You’ll need to make the time to perform all the actions needed to market your company and negotiate with interested parties. You’ll have to find a legal representative and accountant who are experienced in this type of transaction.
You also have to objectively assess how much your company is worth in order to get the price right. The Balance Small Business reminds us that if you set an unrealistically high price, you might not get any offers at all. At the same time, you don’t want to underprice your business.
And last, but certainly not least, you’ll need to detach yourself emotionally from the process. Considering all the effort you’ve put into building your company, this can be extremely challenging.
Advantages of Hiring a Business Broker
It should be clear that selling your company without the assistance of a broker can be a difficult process to navigate. On the other hand, working with a business broker who possesses demonstrable experience in the manufacturing sector offers several critical advantages. A broker can:
- Help you get your business objectively valued: The value of your company isn’t as clear cut as simply tallying your revenue, expenses, assets and debts. You need the insights of financial experts to assess the many variables at play and come to an accurate sale price. A business broker will work with a team of trusted professionals who specialize in this so you can rest assured you’re pricing your company correctly.
- Help market your company: A business broker has an extensive network of contacts whom he or she can approach about your business. Additionally, he or she understands what buyers are looking for and knows how to present your company in its best light in order to maximize the sale price.
- Help keep the sale confidential: A broker will market your company using a blind profile so your competitors and clients don’t learn about your plans.
- Enable you to focus on your business: The last thing you want is for your business to slow down because you’re distracted by the sales process. A broker takes the marketing and sale off your shoulders so you can keep running your company and ensure its continued value.
- Help speed the process along: With years of experience selling companies, a broker can help ensure the process runs smoothly so the deal is closed in a timely manner.
Get Professional Support
All things considered, selling your manufacturing business yourself is possible — but it might not be the smartest decision. Granted, you might save the 10 percent commission — but to counterbalance that point, a good business broker will most likely be able to get you a much higher price than you could yourself.
And finally, as Entrepreneur states, your expertise lies in running your business — so why not rely on the expertise of an experienced business broker to handle the sale of your company?