On the Money: Weigh options for selling a business

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.

-By Corey Vanderpoel is director and Brenen Sieber is managing director of mergers and acquisitions at Baker Tilly Capital in Milwaukee.

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