Recent clients “Jane and John Doe” were satisfied with the market value estimate of their manufacturing business, as determined by the independent valuation we prepared. Armed with this essential piece of information, they were ready to sell the business they had founded and grown with much effort over many years.
John thought they should try to sell the business themselves. After all, weren’t they the best salespeople for their business? And why should they share a portion of the proceeds with a broker? Jane was not so sure and began to research whether hiring a business transaction intermediary was warranted.
One article that Jane found contained the results of a poll conducted by Partner On-Call Network LLC in which sellers of small and medium sized businesses were asked why they hire business brokers instead of trying to sell themselves. The poll identified 62 reasons, including these top eight, in order of frequency cited:
- Brokers know how to sell businesses; most sellers don’t
- Seller doesn’t want to be distracted from running business
- Confidentiality preservation and knowledge of what/when to show buyers
- Access broker’s database of potential buyers and investors
- Maximize price buyers will pay for the business
- Owner does not know how to find buyers
- Prepare owner to sell and prepare business for sale
- Broker understands and can depersonalize negotiations
After discussing this and other inputs that they had received, the Doe’s decided that hiring an intermediary was the prudent decision if they wanted to maximize proceeds from the sale of their business and reduce the risk of no deal or a flawed deal.
All 62 reasons can be found HERE.
For a certified business valuation or assistance with successfully exiting your California company, you can Email Jim Leonhard or call him at 916-800-2716.