When the Time Comes to Sell Your Business who do you Need on Your Team?

by Dione Mauric 9th of March, 2023

When the time comes to sell your business who do you need on your team?

The role of your team is to ensure you get full value for your business when selling.

Selling a business, whether to a family member, your manager or someone outside the company, requires a lot of upfront planning if you want to get full value for your company.

In much the same way you would prepare your house to go on the market to show it in the best light, you want to get your business in order before you sell it, to get the maximum value out of it.

Preparing for a sale often starts by building a trusted team of advisors.

Strategy Advisor - Your Business Broker

The first person to contact is a business broker your "trusted business advisor" who will help you to get an overall understanding of your business, and help you to clarify what you want to achieve with the sale and how you will get there.

Your strategy advisor is likely to be a business broker, exit planning expert or a mergers and acquisitions specialist. This person will help you:

clarify why you’re selling
identify what you want to get out of the transaction
help you understand all aspects of the sales process (This includes valuation, due diligence, the transition process, do’s and don’t and the costliest mistakes to avoid.)
advise you on preparing your business for its sale

This advice will help you take personal stock of what you want, to help you get very clear on why you’re selling, this is a very important first step or first introspection point. Unless you’re very clear on the what and why behind the sale, you may not get what you want from the transaction.

It can be tempting to go to your lawyer or accountant first, but they are going to give you very specialized advice from a single perspective.

Your business broker, on the other hand, can bring together all the moving parts—legal, accounting, insurance and tax. It is a business broker's role to help the other advisors work simultaneously, rather than sequentially.

Most of all, your business broker will propose improvements and investments to help make your business more attractive to potential buyers and maximize its sale value.

The Lawyer

Your lawyer will help you look at compliance laws and regulations affecting your business. The lawyer will also help you anticipate any changes in the legal or regulatory landscape.

As you examine your assets, including intangible assets like intellectual property, the lawyer can also help you understand your ownership rights and what can be transferred as part of the sale.

Intellectual property may include:

trade secrets, such as customer and marketing information
your brand, logos and trademarks
patents and product designs
processes that are unique to your firm
The lawyer can help you draft a shareholder agreement and update the buy-sell agreement between all shareholders, something you should always have current regardless of sale. The lawyer also drafts the terms and agreement of the sale.

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The Accountant

Before buying your business, the buyer will want to carry out thorough due diligence to ensure your books are in order. An accountant can help you prepare beforehand so there are no unexpected surprises.

For example, many business owners mix their personal and business finances.

But if you’ve been writing off business expenses to lower your personal tax or sprinkling income among family members as a tax shelter, you may put off potential buyers. Your accountant can help you identify these types of red flags and clean up your books.

The Banker

Your banker will ensure you can finance a deal if the buyer requires vendor financing. He or she can also play a role in finding a potential buyer. The banker can also play an important role in helping make the business more attractive for potential buyers by financing reinvestments into the business and providing strategic advice.

When the time comes to sell your business, it is critical to maximise the sale price. To do this you will need a team of professional experienced advisors. Give yourself an advantage and contact us today.

Tags: selling business broker small business entrepreneurs