Selling a business is frequently a highly personal process. Yes, this can come down to the fact that it marks a significant life change for some sellers, for example for those who will retire or be considerably wealthier as a result of their sale. But it can also be down to the way in which the sale itself is conducted. Let us explain…
Firstly, some business owners will only consider selling their company via a specialist with years worth of experience dealing with commercial sales brokering. Although we recommend this route, it does not suit everybody. Some entrepreneurs prefer to do things their own way – that is why they are in business for themselves, after all. For business owners who are able to operate well in a sales and marketing environment, the idea of selling their business for themselves is often appealing – even if they lack some of the expertise necessary to close a commercial sale which may often be the biggest of their career.
Each route is fairly typical of the way company principals approach business sales these days. Indeed, if you were to ask the average business owner who is considering selling up they’d probably confess to being in either one camp or the other. Many business owners believe there are simply two options for them when it comes to putting their business on the market – the ‘go it alone’ approach or appointing a sale advisor. However, there is a third option which should not be overlooked. What’s more, it can provide the best of both worlds balancing the need for expertise and entrepreneurial independence.
Middle ways can often seem like a compromise which satisfies no one and ends up being something that falls short of your true ambitions. However, there is an option that lies in the middle between going it alone with a business sale and appointing a sales advisor. It can be highly rewarding.
By using your accountant, or another specialist with experience in business sales, who can take on the task of managing the process and details of the sale, it frees company owners up to do the bit they are good at. For example, this might be finding clients, marketing the company’s best points to potential buyers or negotiating a high sale price. In the background, the less glamorous part of the sale process is done for you. Included in these more mundane processes would be things like taking care of the legal matters, such as drawing up contracts, handling financial enquiries and keeping books up to date.
Generally speaking, within this arrangement the specialist maintains forward momentum with any interested potential buyers whilst the business owner continues to do what they do best and generate interest. Entrepreneurs can find this way of selling a business more rewarding because it plays to their skills of finding potential buyers and hopefully negotiating with them. Although this sort of middle way will take more time and effort on the behalf of the business owner, there is little doubt that it can be more effective than going it entirely alone.
The middle way does involve a good deal of time commitment on the part of the business owner, so it will not suit everyone. For instance, people who are looking for a quick sale and who need to market their business to as many people as possible, or who are giving their business up through ill health, will probably find it is not for them. However, business owners who don’t have a huge commitment in the day-to-day running of their company will find it beneficial.
Another group of business owners who will find the middle way advantageous are those who already have a good network of contacts within their industrial sector. Anyone who is able to leverage their contacts to find potential buyers is likely to find that the commitment level needed to drive a sale through is less than those who have just a few people within their circle. Therefore, the approach tends to suit people who are well-known members of professional and trade associations or who have built up a network through things like local chambers of commerce.
If you think that you will have to start out building up your network of potential buyers from scratch, then it may be better to seek an advisor to help with marketing your business. On the other hand, the middle way could be an effective route to sale particularly if any potential buyers are likely to already operate within your industry. Given that many business sales are made to someone within your sector or from a complementary industry, this route will make sense if you are able to make use of your good name and the professional goodwill that you’ve built up over the years.
If you consider that appointing an experienced sales advisor with expertise in marketing similar businesses to yours is the ‘safest’ option – which will maximise your chances of selling in a reasonable time frame – then going it alone should be viewed as the ‘highest’ risk option. Which choice is made sometimes comes down to nothing more than a personal attitude to risk and no two businesspeople are the same in this regard.
However, by utilising your accountant skills – or whichever sort of professional specialist you choose to help – you can manage your risk. This is because the middle way allows you to reduce the costs associated with a business sale as you are doing much of the hard work for yourself. However, it also means that you won’t be tied in contractually.
If the process fails to generate a sale, you can always turn to a professional sales advisor down the line. On the other hand, if it works out, then the back end of the sale process will all be handled for you, leaving you to focus on the grand scheme rather than the technical details. At its best, the middle way can create an effective partnership that is rewarding without putting you in financial risk.
If you are wanting to sell your business and are unsure of what the best route to exit is, then speak to us, the independent experts, on 1962 609 000. Over the past years we have helped many business owners realise a better exit through the use of honest and impartial advice. Call us now for a free and confidential conversation.
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In the early stages of such an important undertaking, it can be a bit of a moral maze: who do you trust?
Firm Gains gave me confidence with detailed advice and support. I would recommend their services to other entrepreneurs seeking to buy a business.Mr T Washington , Founder
I found it much easier to get my head around a business sale this way than talking to my accountant. You speak a language I understand!
Even though the whole process of selling seems daunting, I’ve got more confidence that I’m heading in the right direction.Mrs T Boothe , Founder
Thank you for your email and the excellent advice provided earlier this week. It was immensely helpful and has helped me to plan my future direction for the practice.
I would have no problem whatsoever in recommending your services in the future.Mr & Mrs Halldron , Co-Owners
Firm Gains were recommended to me and I was not disappointed. They were efficient, helpful and effective responding quickly to my request with all the facts that were needed to ensure a stress-free dialogue with our buyer.
What really helped was the advice over and above the valuation, which was immensely valuable and gave me the confidence to proceed. I would not hesitate in recommending them.Mr C Waite , Founder
We found the advice invaluable, which was clear and concise and felt your firm had a good handle on market trends and business sectors.
With also the backup of the secondary services, there was a feeling you had all bases covered if we wanted to proceed with our exit via Management Buy Out (‘MBO’).Mr D Wills , Director
Thank you for your advice. I was just about to sign up to the wrong kind of business agent for a company of our size, but read your post just in time.
I found a more serious partner, with experience in our industry and we’re already using the same language.Mr F Summerscale , Managing Director
We have been greatly impressed by the clear and impartial advice given to us by Firm Gains. After just an initial phone call we felt much better informed, with a new awareness of the many options available to us.
Firm gains understood our situation quickly and clearly and were anything but ‘pushy’. Refreshing compared to what we’d experienced before.Mr C Hutcheson , Managing Director