Attorneys, accountants and financial advisors do not specialize in the purchase and sale of businesses so often the information they provide is incomplete or lacks pertinent industry or economic considerations.
Louisville, KY (PRWEB) May 16, 2012
Business owners typically have an advisory team that consists of a least an accountant, an attorney, and a financial advisor. Professional advice from these trusted individuals guides the actions and considerations of the owner. When a business owner contemplates selling a business, they will seek the opinions of these same advisors. “The problem is,” according to American Fortune Mergers and Acquisitions CEO, Brian Mazar, “these professionals do not specialize in the purchase and sale of businesses so often the information they provide is incomplete or lacks pertinent industry or economic considerations.” Due to this, Mazar today released his top nine tips that advisory team professionals can incorporate into the advice they give their clients.
In a press conference earlier today, Mazar sited the following nine tips as key factors a business owner should consider and an advisor should incorporate into their decision to sell a business.
1. Don't wait until the business must be sold, for either economic or emotional reasons. Pressure to sell a business creates anxiety and can force a company into accepting a deal that's not good for the seller--or for the buyer.
2. Prepare to sell a business well in advance. Be sure records are complete for at least 5 years back and be current on all accounting and legal matters. Although often overlooked, be sure to spend time cleaning and organizing the plant/store/facility/office. “Just as one would clean their house for visitors, clean the business environment for buyers,” advises Mazar.
3. Hire an experienced business intermediary or mergers and acquisitions advisor. “It is crucial to involve a professional to sell a business. They understand the unique sales process and all of the caveats that may present themselves,” stresses Mazar. Not only are they familiar with the process, but they help owners achieve leverage through buyer competition—a valuable skill for an advisor to have. David Gumpert, former Harvard Business Review associate editor said (pertaining to attorneys), “Inexperienced lawyers are often reluctant to advise their clients to take any risks, whereas lawyers who have been through such negotiations a few times know what risks are reasonable.” This example can be applied to a seller’s experience too. Mazar can’t stress enough the value in seeking out a professional to sell a business.
4. Place a reasonable price on the business. Since an inflated figure either turns-off or slows down potential buyers, rely on the seasoned advisor to help everyone arrive at the best "win-win" price.
5. Carry on "business as usual." Don't become so obsessed with the transaction that attention wavers from day-to-day demands which will affect sales, costs, and profits. Since the selling process could take as long as a year, the buyer needs to keep a healthy and steady business.
6. Anticipate information the buyer may request. For example, in order to obtain financing, the buyer will need appraisals of all assets, a business valuation as well as information to satisfy environmental regulations (when real estate is concerned).
7 . Keep time from dragging down the deal. To keep momentum up, work with the intermediary to be sure potential buyers stay on a time schedule and that offers to purchase move in a timely fashion.
8. Negotiate, don't "dominate." Owners are used to being their own boss, but be prepared to learn that the buyer may be used to having his way, too. With the business advisor’s help, decide ahead of time when "to hold" and when "to fold."
9. Be flexible! Keep the balls rolling once an offer has been made. Study it closely. Just because the offer’s price may be lower than desired, the offer may have other points that will offset it such as higher payments or interest, a consulting agreement, more cash than was anticipated or a buyer that the business is comfortable with. If a counter-offer is necessary, do so only on those points that are of the highest importance. Be willing to negotiate for a win-win in order to sell a business. “There is an old adage that the first offer you get is typically the best offer you will get--and it's amazing how true that statement is,” adds Mazar.
American Fortune Mergers and Acquisitions, LLC is a nation-wide firm that provides services in the areas of growth-to-exit planning, mergers and acquisitions and business valuations for businesses with revenues between $3 million and $100 million. American Fortune was founded by industry veteran Brian S. Mazar who developed a unique process that is sell-side driven. This process makes American Fortune different from most merger & acquisitions firms.
Advisors at American Fortune are not business brokers, they do not represent both sides of a deal and they refuse to follow industry standards just “because.” Their results are different too. Those who sell a business through American Fortune receive better terms, higher selling prices and a true advocate when they sell a business. Due to this, American Fortune successfully sells their businesses at an average of 98% of the listed price.