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Selling Your Own Business: A Few Pointers for the Rogue Maverick

17 Nov Selling Your Own Business: A Few Pointers for the Rogue Maverick

If you are completely aghast at the idea of having an advisor help you work out the trappings of the business broker deal, it may be wise to begin with the information that follows. If not, you may want to follow the link above and find out the benefits of using a merger firm. Otherwise, go it alone. Keep in mind however, that the advice is limited because the advisor is not getting paid.

Because most of the firms we deal with are entrepreneurs, there is a mentality of “I can do it myself.” Which is a mentality that is usually gone by the time the entrepreneur is ready to sell out from his/her particular enterprise. There are some key steps to selling your business, I would consider before jumping in with both feet. Other considerations should be included in your plan when you finally determine that selling your own company is right for you.

Overcome time constraints

Many business owners are extremely busy. Taking time out of operations of the business itself to work on prepping the company’s financials, marketing and overall business plan, operational effectiveness, prepping the proper documents and then shopping it around. Believe me, selling any company represents a full-time pursuit which can be better left to an experienced representative to make it happen in a timely fashion.

If you’ve built a business into a turn-key operation, however, selling your business may be what I like to call a “walk in the cake.” The owner-silent businesses can more easily be sold by a business-savvy owner. With more time on their hands, these entrepreneurs are better able to walk through the sales process of prepping the company, the financials and working out the kinks for finding a strategic business buyer.

Valuation, representation and legal issues

There are legal and ethical potential problems you may run into when it comes time to sell your own business. Even the most seasoned entrepreneurs who know multiples within their own industry may be unaware of other trends which could play a role in the business valuation process, including macro-movements and other nuances of recent deals in similar industries. Some things are left to strategic analysts.

Once again, a bit of outsourcing (probably to your legal partners) will be necessary for checking legal documents, knowing valuations schema and being versed in proper negotiation techniques, but confident and understanding entrepreneurs are generally well-versed enough to make magic happen where none existed. Further still, they may have industry connections that could take them far.

Much can be said for the rogue player wishing to sell their own company. If you think you are game, it could be worth it, but an experience broker-dealer can certainly help to not only sell the business but also significantly increase the value before and during the sales process, giving you a higher overall payout, net of fees. It’s a risky balance to take. I would suggest the latter.

 

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Nate Nead
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC which includes InvestmentBank.com and Crowdfund.co. Nate works works with middle-market corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He is the chief evangelist of the company's growing digital investment banking platform. Reliance Worldwide Investments, LLC a member of FINRA and SIPC and registered with the SEC and MSRB. Nate resides in Seattle, Washington.
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