For many entrepreneurs, selling a business is a one-time event, so it’s important to do it right.
Getting the best price for the business can be a complex journey, involving many factors outside the seller’s range of knowledge. But it starts with hiring the right team of professionals – while keeping in mind that the wrong hires might be people with whom the seller has long done business, says Terry Monroe, founder and president of American Business Brokers & Advisors (ABBA) and author of Hidden Wealth: The Secret to Getting Top Dollar for Your Business.
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“Almost all business owners have an attorney and an accountant they have worked with for years and with whom they feel comfortable working,” Monroe says. “But those people might lack experience in selling businesses, which could result in the seller leaving thousands of dollars on the table.”
Tips For Selling Your Business
Monroe specifies the right type of professionals a seller needs to finalize selling your business:
- The attorney. The attorney’s role in the selling transaction is to give the seller legal advice on what can hurt them in the sale, such as taxes. “There’s a big difference between attorneys who know how to prepare real estate deeds and divorces, and one who knows all that’s involved in the sale of a business,” Monroe says. “I would start by asking the attorney with whom you have a relationship to refer you to someone they think has the skills and time to devote to you. Be proactive when employing an attorney, and don’t settle on just getting by.”
- The accountant. “Sometimes an accountant who has worked for the business owner for years is not in tune with the marketplace in which the owner operates,” Monroe says. “That accountant may throw out a valuation that is nowhere near the market value of the business. There have been times I’ve sent the business owner back to their accountant to ask them how knowledgeable they are about the industry.”
- A business intermediary. Monroe points out that neither an accountant nor an attorney works with buyers every day, thus they often don’t have an understanding of what businesses are worth or how buyers are reacting to businesses. “This is why you want to be represented by an experienced intermediary who does work on the front lines every day,” Monroe says. “A business intermediary is a crucial part of the selling process of your business, keeping you focused on your goal to sell your business for the highest value.” A good place to begin a search for a business intermediary, Monroe says, is the International Business Brokers Association. Larger transactions, he adds, may require the services of an investment banker.
“Just as in sports, if a seller doesn’t have the right team of players in the game, they will either get defeated or become hurt in some way,” Monroe says. “Get the right players involved to help you through this difficult and complex process and alert you to situations so that you don’t get blind-sided along the way.”
About Terry Monroe
Terry Monroe, is founder and president of American Business Brokers & Advisors (ABBA) and author of Hidden Wealth: The Secret to Getting Top Dollar for Your Business. Monroe has been in the business of establishing, operating, and selling businesses for more than 30 years. As president of ABBA, which he founded in 1999, he serves as an advisor to business buyers and sellers throughout the nation. His knowledge and expertise in multi-store operations and sales has led to many multimillion-dollar transactions. As an expert source in the convenience store industry, he writes a routine “Financial Insights” guest column for Convenience Store News and has been featured in numerous publications, including The Wall Street Journal, Entrepreneur magazine, CNN Money, and USA Today.