How to utilize a business broker to help close the sale of your business

Completing due diligence and closing the sale require broker experience and expertise.

In this post, we cover some of the most important work a broker will be executing on your behalf when you sell your business: completing due diligence work and helping you through a successful closing.

This is very important work – critical to successfully transitioning you out of your business and onto your next adventure.

Your broker will be helping coordinate due diligence, clearing contingencies, obtaining financing to facilitate the sale if required, assisting in issue resolution, finalizing the purchase agreement, and reviewing final documents.

Marketing your business-for-sale is critical activity and, other than business valuation and negotiations, these are the critical closing steps in the sale. 

Coordinating due diligence and clearing contingencies are two areas where broker experience really pays the biggest dividends – and can really keep you out of trouble. Ensuring that 100% of the homework and research that needs to be done, is completed, is critical to ensuring that you won’t be tripped up in the closing of your sale. An experienced broker has “seen it all” and can anticipate problems before they occur.

Obtaining financing is an area most business owners don’t consider when thinking about selling their life’s work. Sometimes owner financing is critical to putting the best possible deal together; frequently an SBA loan is utilized. Regardless, how a deal is financed, an experienced broker can “check all the boxes” to make certain financing is in place, so your deal stays in place. 

When it comes to issue resolution, many business owners think they can take care of things without a broker. But to handle this by themselves, they must ‘take their eye off the ball’ regarding day-to-day business operations, do research into the issues, etc. Most importantly, the drain on time and emotions is high cost. This is like any legal conflict or issue; best left to the professionals. 

Getting the definitive purchase agreement and final documents pulled together are the two final steps in the process. Both steps are important and should be handled by a professional broker. The details of purchase agreement need to be meticulously clarified to ensure no surprises for either party. And the final documents become the legacy of the transaction. While you will want to have your personal or corporate legal counsel review these important documents – they absolutely should be assembled, reviewed, and approved by a business broker. Any good business broker will welcome a relationship with your personal consultants and attorneys, if you have them. A business owner should encourage them to work closely with the broker.

Selling your business is one of the most important decisions you will ever make. Taking advantage of the expertise of an experienced business broker is one of the best investments you’ll ever make. Contact an experienced business broker before you list your business.

Get expert help. You wouldn’t have your dentist do your taxes or list and sell your home.
Make certain you work with an experienced business broker to prepare your business for its sale and successful closing so you can get it sold for the best possible return. 

Selling before a capital gains taxe increase.

The anticipated capital gains tax increase from 20% to 39.6% will have huge potential impact on what you can make from the sale of your business. Right now, buyer activity is high - it’s a seller’s market! And because of COVID-19, there’s pent-up capital for the right business opportunity in which to invest and many businesses are SELLING at a PREMIUM. 

Get in touch with California Business Advisors today.
Aaron Thom, California Business Advisors, Inc.