The Summit Group
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The Role of the Business Broker

Posted on June 10, 2018

You’ve decided that you want to sell your business.  Should you sell it yourself or should you use a Business Broker?

The sale of your business may be the singularly most important business activity that you undertake.  Your retirement may depend on what you sell it for (or more importantly what you get to keep after tax).  Your employees job security may well depend on the choice that you make.  Typically, most owner mangers only sell their business once…and you want to make sure that you get it right the first time.

The short answer is that a Business Broker will help you ensure that you sell your business for the best price, on the best terms, in a timely manner and with the least amount of disruption to your business

The Business Broker will be your trusted advisor who will “Quarterback” the sale process and ensure that your business gets exposure to the market and hopefully competitive bidding for your business A Business Broker will also allow the business owner to focus on running the business and insuring that it performs well during the sale process.

The Business Brokers scope of work:

 The scope of work performed by a Business Broker is varied, detailed and complicated.  It includes:

  • Assist the owner to prepare the business for sale.
  • In conjunction with their Lawyer, assist the Shareholders in dealing with the Shareholder Agreement as it relates to selling the business.
  • In conjunction with their Lawyer, assist the Shareholders in dealing with the Shareholder Agreement as it relates to selling the business.
  • Plan the sale process and assist the owner in seeking professional advice for tax planning, financial planning and legal planning.
  • Review the business, the Industry, the Marketplace and trends.
  • Assist in preparing financial projections.
  • Review the business and the Industry for growth opportunities.
  • Assist the seller with determining the value of the business.
  • Prepare a marketing package highlighting the strengths of the business and growth potential.
  • In conjunction with the sellers’ lawyer, prepare a confidentiality agreement for prospective buyers to sign.
  • Find qualified buyers and review them with the seller.
  • Review potential Management Buy Out options with the seller.
  • Present the marketing package to the qualified buyers.
  • Assist the seller with reviewing the offers for price and as importantly, the terms.
  • Negotiate the deal on behalf of the seller.
  • Liaise between seller and buyer…keeping the communication lines open.
  • Collect and organize the due diligence information required by the buyer and lenders
  • Assist the Lawyers in completing the Letter of Intent and the Purchase Agreement.
  • Liaise between other professionals including Business Valuators, Accountants, Tax Advisors, Lawyers, Real Estate Agents, Environmental Engineers, Banks and Lenders.
  • Assist with other closing matters.
  • Assist the seller with post closing matters.

The sale of a business is a complicated process involving many stages of the deal and many parties representing both the seller and the buyer.   When you choose a Business Broker, make sure that the Business Broker supplies all the services noted above in order to assist you in the most professional way possible

 

 

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