Is a Business Broker Your Best Advocate?
By Tom Kirk
noun – a person who buys and sells goods or assets for others
verb – arrange or negotiate
Thank goodness for the resources that business brokers can provide. They can help introduce relationships with potential buyers and sellers of which you might otherwise have never been aware. They can be experts in the drivers of business value in your particular industry because of their years of experience brokering business transitions in that industry or profession. They can make available details of actual business transitions perhaps comparable to what you are considering. All of this can be very valuable and necessary for a successful business transition, especially if the transition is to an outsider (non-family, non-employee).
Before you reach out for the resources a business broker may bring to your business transition strategy you must be very clear about what you want, need and require to have happen. That’s because business brokers are very motivated to make a transaction occur, and any transaction is better for them than no transaction. I have heard it said that the biggest concessions are often made in the last few minutes of a negotiation. If you are not 100% clear about what you want, need and require from your business transition, you could accept something that you might regret for the rest of your life.
An example of how having a transitional plan in place could benefit you as the owner might look like this:
You have a business in a specialized industry. You also have potential buyers that are a national organization and have engaged a business broker concentrating in this industry to help facilitate the transaction. After a period of due diligence, a formal letter of intent (LOI) was presented to you by the potential buyer, but there was a problem -the terms and conditions were not acceptable to you. Subsequent LOIs were then presented, but still fell short of what you wanted and required. Two years into this process, the business broker finally says the last LOI was the best deal you were going to get and you should just accept it!
If a business broker comes with a do or die scenario, and you the owner don’t know what you need from the sale of your business in order to live the life you have in mind for yourself, you might take the offer. And without that knowledge you may accept a deal that will not provide you with the resources necessary to experience your next great adventure as you desired. But, if you had used a tool like The Future WealthProjectionTMyou may have realized that the offer would not be enough and decided to walk away from this deal rather than to accept those consequences.
With the confidence that a The Future WealthProjection can give you, the outcome could have looked more like this:
You presented your non-negotiable terms and conditions based on your The Future WealthProjection tool to the potential buyer, (against the advice of the business broker) and gave them 30 days to take it or leave it. They took it, the sale closed and you experienced the great life they had in mind!
Confidently knowing what you need from the transition of your business and taking all the steps necessary to then go and get it takes a plan, and a Roadmap is your best tool. That is why we offer The Future WealthProjection aspart ofThe Transition Roadmap Developer TM– a transformational process that takes into consideration the practical, financial, and emotional aspects of your unique business transition challenge and delivers a customized step-by-step plan of actions.
All small businesses transition eventually. Be intentional about how you want this to happen. Call today and schedule your complimentary consultation with one of our WealthCoachesTMto see if The Transition Roadmap Developer is the process you may want to investigate for improved clarity in this critically important area of your personal and business life.
You should not assume that any discussion or information contained in this publication serves as the receipt of, or as a substitute for, personalized investment advice from FirstWave Financial. A copy of the FirstWave’s current written disclosure statement discussing our advisory services and fees is available upon request.