LATEST NEWS Professional Services
March 21, 2005
The team concept
During the course of selling a business or transferring it to the next generation, a business owner will need to access expertise in many areas. At Robbinex we recommend that you take the time to identify the team members you will need and assess their ability to obtain the best value for your business.
Your professional team may consist of several groups or individuals including a business analyst/valuator, real estate broker, equipment or real estate appraiser, accountant, lawyer, industrial psychologist, marketing specialist, environmental engineer, financial planner, insurance agent, tax specialist, public relations specialist, and a business intermediary. Each member will have a role to fill in your goal to sell your business. This new role should not interfere with the responsibilities that you require from them with your day-to-day business practices.
Accountant: Most business owners will rely on their accountant to provide financial advice for the ongoing activities of their business. In the sale of your business, your accountant will need to be able to assist you in establishing the best corporate structure to help you minimize the tax ramifications.
Business Analyst: Do you have a realistic expectation of the value of your business? Many business owners underestimate the worth of their goodwill while others want to base a price on what they have put into the business. A purchaser interested in your company will look at the ability of the business to generate profits. Your analyst will need to select the best method to value your business based not only on your profitability, but also on the marketability of your business, the comparability to others in the construction industry, as well as reviewing transactions of similar businesses.
Marketing Specialist: Many business owners have experienced the success of working with a marketing specialist to increase awareness of their business and products. A professional experienced in marketing businesses will not only outline the value of your business as it stands today, but will also be able to present the opportunities that will exist for a future owner.
Lawyer: Your lawyer needs to be able to interpret and explain the legal documents involved in a sale to ensure that the transaction you are contemplating is in your best interests and complies with current laws.
Business Intermediary: When considering a team of professionals to help you sell your business, you should also ask yourself who will lead this team? An intermediary’s role is to facilitate the activities of your professionals and maintain a forward moving momentum that will result in a successful transaction. They should have the ability to interpret financial statements provided by your accountant and the valuation provided by your business analyst. Your intermediary will communicate between your lawyer and the purchaser’s lawyer. Not only should your intermediary be able to identify potential purchasers for your business, they should also qualify those purchasers before providing any confidential information.
When considering who will be best suited for your team of professionals ask the following questions:
— What experience do they have in selling a business?
— Have they been involved in a sale transaction in the construction industry?
— Are they licensed according to local laws?
— When was their last completed sale transaction?
Take the time to perform a due diligence on your professionals and ask them to provide references. A successful entrepreneur is very competent when it comes to the daily negotiations that occur in their business life. Some entrepreneurs may even use these skills to sell their business.
As a business owner ask yourself: What would happen to my business if I concentrate on selling it rather than running it? It is very important to maintain and continue to grow the business while pursuing a sale ... if you want to get the highest value. Consider letting other professionals take care of the sale of your business while you do what you do best — running your business.
Doug Robbins is president of Robbinex Inc., specialists in the sale of privately-owned business. He can be reached at 1-888-ROBBINEX, or www.robbinex.com.
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