Regardless of your business’s location, size, and industry, for an experienced business advisor, the process of selling a business is actually very straightforward. It is the do-it-yourself seller who typically experiences a more uncertain path to selling a business. If you are selling your business, choosing to work with professional business advisors (rather than navigating the sales process on your own), will help ensure the best outcome for you and your business. Selling your business on your own is certainly an option but consider these 3 foundational reasons to secure professional representation.
1. Confidentiality
Confidentiality is the number one reason you need professional representation when selling a business. Unless you already have a buyer secured, you will need to market your business for sale. When our business advisors at Viking M&A package a business for sale, we create a short profile of pertinent details about the business’s greatest assets and differentiators, but without disclosing any sensitive names or details. We market the business using the summary profile and other materials to our own network of thousands of vetted & qualified prospective buyers, as well as other marketing channels, going to great lengths to protect the confidentiality of the business’s identity.
Why is confidentiality important? It is actually more than important. It is absolutely crucial. Consider what would happen if word were to spread that you are working on selling your business. Employees may doubt the stability of their employment and begin to look elsewhere. If customers hear that your business is for sale, they may begin to shop around, unsure of your ability to serve their needs moving forward. Competitors can try to use the information to sell against you. Viking’s business advisors can pursue prospects and field inquiries from potential buyers without ever mentioning your name or your business’s name. Trusted, professional representation is absolutely the best way to maintain confidentiality while selling your business.
2. Buyer Vetting & Negotiations
Professional representation makes all the difference in the meetings and negotiations involved between a seller and buyer — beginning with identifying the buyer. If you are selling your business on your own, you will be responsible for vetting potential buyers. This can be time consuming and stressful at best. At Viking, we vet potential buyers through our pre-screening process. Before we ever present a buyer to you for consideration, we ensure they are serious and financially capable of purchasing your business. When you have professional representation, you do not have to waste time and energy on meetings with buyers who are not actually viable prospects.
When a buyer is identified, your advisor will be part of the buyer/seller meetings, and moving forward, if and when an offer is made, a business broker will meet with you to explain the offer and discuss its various components in detail. You are still the one selling your business, so the decision to accept, reject, or negotiate is yours; but your broker will offer guidance and an expert opinion to assist you in determining the best decision for you.
3. Due Diligence & Closing
The objective of the due diligence period is to confirm that you have accurately represented your business prior to the buyer issuing their offer letter. (Most buyers are looking only for material differences or “surprises” that were previously unknown to them, not minor discrepancies.) The length and thoroughness of this period is generally dictated by the buyer and can vary a great deal. Then, after due diligence and buyer financing are completed, closing documents must be drafted, which include a great number of legal documents and agreements. Again, this can be a time-consuming and stressful period for the seller.
If you are selling your business with professional representation, however, your business advisor continues to work with you through every step, including the due diligence period and closing. Your advisor counsels and assists wherever possible during the due diligence period. At Viking M&A, while we know most deals that get to the due diligence period proceed through to closing, we also know that your business is not sold until the sale has officially closed. So, an often-overlooked benefit of good professional representation is that, even as the prospective buyer performs their due diligence, our business advisors continue to collect new inquiries in order to keep the sales pipeline open.
Finally, in preparation for closing, your advisor can recommend financial and legal counsel to help navigate the various legal agreements and help you minimize the tax impact of selling a business. With professional representation, the average time from offer acceptance to closing (including due diligence, pre-closing, and closing) ranges from 60 to 75 days.
We understand you are not just selling a business. You are selling your business. If you recognize the need for confidentiality, want to minimize wasted time and effort, and also sell for the price your hard work deserves, then your sale is worthy of experienced professional representation. Our business advisors have decades of experience and know how to sell a business. If you are thinking of selling your business, we are here to help. Contact us today for a no-cost consultation.