The successful construction of a home requires skilled contributions from multiple building industry professionals including architects, roofers, drywall installers, plumbers, & electricians. Select the wrong parties and the project will have delays, cost overruns, and potentially an unhappy homeowner.
The sale of a business is a sophisticated, nuanced process requiring comprehensive knowledge, experience, and superior skill. It is a process that most entrepreneurs are unfamiliar with when they begin to think about retirement. Intelligent entrepreneurs surround themselves with high caliber professionals. The following are the important advisors to place on your team if you are looking to sell a business for a strong market value in a transaction employing best practices.
The quarterback of a business sale team is the business broker. The professional services provided by an intermediary in selling a company require extensive experience and knowledge to perform at a high level. The first service provided is the valuation of a business. Valuing a business is a complicated, subjective science incorporating accounting, finance, and investment principles on one side of the spectrum and expertise similar to assessing art on the other. The ability to price a business incorporating knowledge of the 2023 buyer climate and create a competitive marketplace for parties to acquire a company are two reasons why only a professional intermediary with a resume of success should be engaged. In many cases, only one opportunity for selling in a confidential environment at a premium value exists for an entrepreneur. Potential buyers located, the next step is to facilitate information provision and negotiations in a manner that ensures all relevant elements are addressed and decisions are made from a foundation of knowledge. The top business brokers in the marketplace will work for free being compensated with a percentage of the sale when the transaction is completed. Salespeople requesting retainers convey a lack of confidence in their ability to perform.
A business broker selected, they will be joined on the transaction team by the accountant and attorney of the business owner. A similar pairing will exist on the buyer side of the transaction. Roles of the accountant include assessing the valuation, supporting due diligence (Essentially a building inspection of a business), and providing guidance on tax allocation. Attorneys mitigate post transaction liability.
An additional professional needed in most deals is a banker. Although at face level a buyer supporting professional, in fact this is a VERY important party to the seller, as the ability to get the deal financed will impact the percentage of cash and price received at closing.
Failure to build the right advisory team will likely cost an entrepreneur money in sale price, cash at closing, taxes, or potential deal trailing liabilities. The top business brokerage firms have a significant Rolodex of professional advisors they can introduce to buyers & sellers. | Joseph Hollcraft, IBA
Additional information on IBA, an ORLA Allied Partner, can be found at www.ibainc.com. Contact Joseph Hollcraft at 503.739.4880, and Gregory Kovsky, IBA’s President & CEO, at 425.4543052.
This guest blog was submitted by International Business Associates (IBA). For more information on guest blog opportunities, contact Marla McColly, Business Development Director, Oregon Restaurant & Lodging Association.