Selecting a Business Intermediary / The Planning Process
By: Michael Fekkes, CBI - ENLIGN Business Brokers
Business brokers assist sellers and buyers of privately held companies in the acquisition and sales process. A competent and experienced business intermediary can be an invaluable resource to sellers and buyers alike. Traditionally, business brokers have almost always represented the seller but buyer representation is becoming more frequent. While there is a wide range of services provided to business owners the most commonly provided, specific to a sale, are as follows:
1. Preparation of a business valuation
2. Creation of a detailed offering/marketing package
3. Development of a targeted marketing plan
4. Implementation of the marketing plan
5. Qualification of buyers
6. Negotiation of Letter of Intent (LOI) & Definitive Purchase Agreement (DPA)
7. Assistance in the buyer’s due diligence process
8. Securing financing for the buyer
9. Collaboration with the seller’s & buyer’s transaction team (CPA’s, Attorney’s etc.)
10. Post sale transition and follow-up assistance
Over the last twenty years, I have met some incredibly intelligent, successful and talented business owners and have a true admiration for the significant amount of work, time and sweat equity that was devoted to building their business. The majority of these business owners were able to maximize the market value of their company, upon sale, through the proactive implementation of an exit strategy. Historically, a business owner sells only 1 business in their lifetime and it is the 2 or 3 years prior to selling the business that are the most critical. Ensuring that the financials are well organized in a format which complements the business enterprise and maximizes the value of the company, is a process that, when adopted early, can offer significant financial rewards upon the sale.
Traditionally, a business owner does not contact a business intermediary company until immediately prior to selling the business. In some instances, as with the case of divorce or illness, this is unavoidable and an experienced M&A advisor can assist with a timely valuation and sale of the business. Selling a closely held enterprise is very complex with many variables involved and it is important to seek expert advice for your succession planning at an early stage. By creating a strategic exit plan and detailing a specific timetable of actions to be taken, you will have a clear plan of action and know exactly when and how you will be leaving the company. Determining the worth of one’s business and how that value is computed, is very important. In some instances, there are a few changes that an owner can make that would dramatically increase the transaction value of the company. Detailed and methodical planning coupled with a proven merger and acquisition team can produce thousands of incremental dollars when it comes time to sell the business.
Michael Fekkes is a Senior Broker at Enlign Business Brokers in Nashville, TN. Michael is a Certified Business Intermediary CBI®, a member of the International Business Brokers Association IBBA®, as well as a former business owner. He can be reached at 910.691.2202 or mfekkes@enlign.com. Enlign Business Brokers (www.enlign.com) is a Professional Services Firm serving the Southeast that is headquartered in Raleigh, NC with regional offices in Nashville, TN and Atlanta, GA. providing business intermediary services ranging from valuation and sale to exit & succession planning strategies.
