A key ingredient of successfully building a business is to develop a strong team around you. That will be equally true when you want to sell your business. You’ll want the right team on your side, including some people within your company, and some outside team members.
Your inside team
Your inside team should consist of your bookkeeper or controller, your shop foreman or manager, and any officers of the company. You’ll likely want help preparing the financial and other information you’ll need to provide a potential buyer, but you also want to avoid the downsides that can occur if all your employees know the business may be sold. You need to choose the people who you can most trust to assist you with the process while maintaining confidentiality
This is not to say that you won’t have people who you can trust but who may not fit this role; trust has levels of confidence. When I began the process of selling my collision repair business, my first discussions about it within the company were with my controller. She had been with the company more than a dozen years and was someone I knew I could trust. I knew she could get me the financial information I would need at a moment’s notice.
We didn’t create a written agreement (because of our level of trust), but we discussed the need to keep this between us, and we had a verbal agreement that she would receive a year’s severance after the sale. I wanted to assure her she would be taken care of, particularly since her position was one that wasn’t likely to move to the new company with the sale.
Your outside team
Your outside team should consist of people in your comfort zone. This could a trusted friend, a spouse, or a colleague who recently sold. It certainly will include an attorney. That may not be the attorney your business has worked with on other issues.
In my case, my company’s lawyer was a real estate attorney with a CPA background, so he had the skills and expertise I needed. However, since our transaction was large (12 shop locations), I also worked with a mergers and acquisitions attorney for consulting sessions. I wasn’t second-guessing my attorney; I was just making sure the entire scope of work was complete.
The same could hold true with your accountant. Ideally, you can work with your existing accountant, if he or she is someone who really knows and has audited your business, not just reviewed whatever you’ve provided. Make them aware well in advance that there may be a liquidation event. Good financial data is critical, and it’s only become more complicated in recent years with the pandemic and such things as the SBA PPP loans, etc.
Do you need a business broker?
Keep in mind, that’s what I do, so I see the upside of having a broker on your team, but I also tell people If you’re completely versed in your business, and you know its realistic value, and you understand the current conditions in the industry, and your market, you may not need a broker. If your business is not large, if you know exactly what’s going on because you have a management system, a financial system, and a good CPA, just sell it and move forward. For others, a broker can be helpful.
I’ve seen people who have poor accounting habits or language barriers. I’ve seen people who think great Google reviews overcome their company’s lack of a management system. I’ve seen people with unrealistic valuations of what their business is worth (either too high or too low). I’ve seen people unsure about the transaction process itself. In all those cases, a broker can bring value.
It can’t hurt to consult with a broker. See the scope of what they can do for you. If there’s a lot of duplication of items you already have covered, don’t hire them.
Do you remember seeing the side-by-side photos of various presidents at the start and end of their eight years in office? Remember how it generally looks like they’ve aged 20 years? That job can take a toll and so can the months involved in closing a business sales transaction. Having the right team around you is crucial to getting through it successfully.
