Selling Your Business - Who You Gonna Call?
You've grown your business over the years and now you're ready to slow down and sell it
. Don't make the biggest mistake of your life and try to sell it on your own.In my interviews with those who have sold their businesses, I asked each one, "Who did you turn to for advice when it came time to sell your business?" Some had done it on their own, but admitted that it was not one of their best decisions. Some relied primarily on a lawyer, or business coach, some their accountant and a number turned to other CEOs for advice. About half used a business broker or investment banker.
There are two major considerations in a business sale; the technical side, including taxation, legal, financial, and transactional aspects; and the leadership side which includes setting the vision, managing growth and dealing with people and family issues. Generally, you can save money on the technical side and make money on the leadership side.
On the Leadership Side
A Business Transition Coach
Think of selling your business as analogous to building a house. The first person you want to talk with when you build a home is an architect; someone who can help with the vision, enhance it, put all the pieces together and make it a thing of beauty. Find a facilitator who can help you to co-ordinate the process and keep you on track with your goals.
A Leadership Coach
A good leadership coach can help you to add significant value to your business by motivating you to do many of the things you always wanted to do but haven't yet gotten around to. A company that claims "our people are our greatest asset" can turn that asset into business value if they invest in their people. Mickey McDonald, commenting about the sale of his business in Halifax said, "I always invested in my people. We did sales training, leadership training, team training, and when I sold the business, they were integral to the deal. They could run the business without me."
On the Technical Side
M&A Lawyer
Pick a Mergers and Acquisitions Lawyer who has demonstrated experience in handling business deals similar in size and nature to your business. They require good business sense. They need to understand that it's all about getting a good deal and not about being confrontational. And they need good 'chemistry' with you. Insist upon complementary values and principles. If your goal is to do an honest, win-win deal, you want a lawyer who works the same way.
Tax Lawyer
A good tax lawyer will help ensure that your after-tax costs are minimized. They will need expertise in all areas of taxation related to selling your business including corporate and personal income tax, international tax, and the taxation of trusts and estates. When you take a pro-active approach, you'll achieve tax savings and be able to take advantage of legal deferrals available under an increasingly complex tax system.
Accountant
You can probably continue to use your existing accountant if you are satisfied with his/her ability to meet your business needs. However, watch for any signs that your accountant is trying to stall your sale. If your business represents a significant portion of the accountant's revenue, a sale may mean your company will no longer be using their services. If you are concerned about this, address it directly with your accountant or consider using someone else when preparing to sell your business.
Investment Banker
A business broker or investment banker can bring experience, advice and concrete leads to help you sell your business. They'll undertake a thorough valuation and recommend specific actions that will increase the business's value by the time you want to sell. When I discussed investment bankers with the former business owners, those who had used them thought they were mandatory in order to get the best deal. Those who had done it on their own didn't regret not having one, but perhaps they didn't know what they didn't know. As a result, they lost opportunities to leverage their business, and went through emotional hell without the support they needed to complete the sale.
Financial Advisor
A financial advisor can recommend tax-advantaged tools that will help you manage risk in the period leading up to the sale of the business and ultimately, to transform business assets to create personal wealth. A good financial advisor will work collaboratively with your other advisors to set up plans that will take advantage of advanced tax and insurance strategies to minimize, eliminate, or avoid taxes.
An Advisory Team
A timely, thoughtful approach to selling your business begins three to five years in advance of your target sell date. When you choose the right members of the team, you assemble a group of professionals with education, experience, and skills who will help you to achieve your goals and prepare you and your business for transition.
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