If you've ever sold your house you know the feeling of being "attached." Because the home you're selling IS nicer than your neighbor’s house, even if theirs is on a bigger lot or has an extra bedroom. Your color scheme, decor and the layout certainly warrants a full price offer, even if the full price promoted is 20 percent higher than market value.
Therein lies the benefit of the realtor. We hire realtors because they treat your home sale as a business transaction, not a personal commentary on your self worth.
Related Content
> FAQ: What's My IT Services Business Worth?
> IT Service Provider M&A Guidance
> All of Our Views: Channel E2E M&A Topic Center
The same applies to selling your company. Yes, I’m sure your company is better than your competitors’, your client relationships are stronger than average, your team members are smarter than their peers. You’ve built your business from the ground up through hard work and many sleepless nights. But at the end of the day, you are selling a business -- and it’s best not to allow that transaction to be personal.
Tips for Selecting M&A Brokers
My advice is to hire a business broker -- the same way you would a realtor to represent your house. But, take your time to find the right fit for you and your business. Here are a few tips that I’ve learned through my own experience building and exiting a recurring revenue business:
- Are you compatible with the broker? You will be spending lot of time working together, so make sure you don’t dread seeing their name on your caller ID.
- Does this broker seem trustworthy? You are putting your business in their hands, so make sure you get a ‘good feeling’ about them. If you aren’t sure, ask for references, and/or invite your business partner or another trusted source to join your interview calls.
- Does the broker have experience in your market? Just because a broker has helped to sell multiple retail store businesses or health care facilities does not mean they understand the technology market and your niche. Make sure they ‘get it.’
- Did the broker come prepared to your call? Did they ask good questions about you, your business, your hoped for valuation? Did they do any market research?
- Ask them about the process. Some brokers will use LinkedIn sources to sell a business; others will use their personal contacts; still others will take another approach altogether. Make sure you understand how they would intend to move forward. Also, find out how they get involved in executive overviews, data collection, presentations and meetings.
- Ask about their fee. Most business brokers will require a percentage of overall sale fee. Make sure you understand if this fee includes current business account funds, initial payout and/or earnout payments. And, trust me, a good broker earns every penny they receive.
Selling a business can be an arduous process, and it can get emotional at times. Give your company the best opportunity for a successful transaction by using a professional.
