Every homeowner has had to deal with the hassle of a leaky plumbing fixture and the decision to call a professional plumber or do the work themselves. There are advantages and disadvantages to both, often dependent on many factors: fees, experience, knowledge, time availability, resources, etc.
Now consider an even greater investment than your home: your business. Often, this asset comprises the majority of your net worth and you have only one opportunity to sell it. Do you want to do the work yourself or hire an investment banker?
Advantages to selling a business yourself vs. hiring a professional include: no investment banking commission; full personal involvement; and awareness of every step of the process.
Now consider the benefits of hiring an investment banker:
Process management
Considerable personal time savings
Fewer business and personal disruptions
Experienced staff with reputation for completing deals and navigating obstacles
Resources to streamline industry and buyer research
Experience using electronic data rooms to streamline due diligence
Transaction and negotiation expertise
Financial experts to analyze business and develop financial models and sale documents
Knowledge of documents such as non-disclosure agreement, letter of intent, purchase agreement, etc.
Familiarity managing client confidentiality through coordinated data sharing and site visits
Negotiation skills and knowledge of critical transaction terms
Coordinating advisors and all parties to maintain deal momentum through closing
Value maximization
Insights into current market valuations
Resources and experience to find the right buyers
Creativity to develop and present growth opportunities
Ability to generate competition among potential buyers
I would encourage all business owners considering a future sale to sit down with an investment banker to gain knowledge of the process. There is likely no fee or obligation for this service, and you can then make an informed decision of whether to sell the company using a DIY approach or hire a professional.
