STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.
Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.
Once you’ve sold it, you will want a wealth management expert who isn’t beholden to Wall Street to help manage your new surge of wealth. Your life will not be simpler. It will just be different – but hopefully much better from here on.
If your business sale will create a liquid net worth of over $10 million,use this free guide to choose the best financial advisor for your situation, The Ultimate Guide for Choosing the Best Financial Advisor for Investors with $10 Million – $500 Million Liquid Assets. If you want to talk to an expert today, schedule a free call with one of our founding wealth managers, Hutch Ashoo or Chris Snyder, both of whom have over 30 years of experience.
If you have an 8, 9, or 10-figure business and are thinking about selling it within the next 5-10 years, now is the time to start working out the details. Yes – doing this right will take time.
To achieve maximum value from selling a business while enjoying as stress-free a business sale process as possible, you must first develop an exit strategy, and then assemble the right team.
For help assembling the right team, though each merger and acquisition is different, you’ll likely want the following five specialists:
– Financial advisor
– Investment banker
– Transaction attorney
– Business lawyer
As you are about to see, each of these people plays a distinct role in selling a business so that you have the most successful and rewarding experience possible. They will see things you won’t see. They’ll know questions to ask you haven’t thought about. They’ll protect you from getting a raw deal. And they will help ensure the business M&A process goes as smoothly as possible.
See the CEO’s 7 critical steps to selling a business. Get the free Exiting Strategies guide.
Table of Contents
In a bit, we’ll detail what each specialist on your business sale team does to help with selling a business. Armed with that information, you will be able to seek out the best experts for your team. You will know what to look for in the vetting process.
But first, here’s a quick rundown of eight essential tasks these five expert advisors will help you accomplish so you have the best possible experience with selling your business.
8 Ways Your Team of Experts Helps with Selling a Business:
Help Establish and Quantify Realistic Objectives
Your livelihood, emotions, and perhaps even your identity are so intertwined with your business that it will be very difficult for you to look at selling a business objectively at all times.
You need people on your team who will stick to the process they have used effectively with their previous 8, 9, and 10-figure business sale experiences. You need people who can keep you tethered to your priorities and goals. That begins by having quantifiable and realistic objectives that your team helps you clarify.
Determine Your Net Value and Likely Price for Selling the Business
These are not the same thing. Your advisor specialists will have a better feel for the mergers and acquisitions market than you will. If they determine it has valuable upside, you may be able to sell your business it for more than the net value.
Or, they may find that a new business owner may have trouble duplicating your success and will be unlikely to pay for the full net value. You’ll need help figuring this out so you know what to expect as you engage with potential buyers.
Create and Enhance Value Drivers of the Company
Are there ways to increase the value of your company before you formally begin the business sale process? Can you increase its value before engaging with prospective buyers?
Your team will take a fresh look at your business with an experienced set of eyes and an outside perspective. They may identify some untapped sources of value you haven’t capitalized on.
This is one reason why you want to begin exploring the process for selling a business worth 8, 9, or 10figuresseveral years before you actually hope to sell it. Suppose your team identifies three areas you should develop that will increase the value of your business in the eyes of a buyer.
It’s not uncommon for those sorts of changes to take a couple years to implement. It might be a new sales process, hiring and developing a couple new positions, or leveraging automation in your marketing and customer acquisition. Many such improvements can be identified in most businesses, but few can be implemented quickly.
Your business sale team will help you identify these.
Expedite the Business Sale Process by Solving Problems, Avoiding Mistakes
Inexperienced advisors will make the same mistakes you would have made if you tried selling a business on your own. You will miss key steps and have to backtrack. You will not realize some of the issues you should have dealt with before starting negotiation.
Selling a business worth 8, 9, or 10figuresis not simple or easy. But an experienced team will make it go smoother and faster than if you try to do it all on your own or with rookie advisors. This is also why you should develop your business exit strategy first.
Level the Playing Field so Buyer’s Advisors Don’t Outsmart You
The buyer will have their team of experts too. Your team and their team will hash out a lot of details during the business sale negotiation process. If your team isn’t up to the task, you could end up leaving lots of money on the table when selling a business.
But money isn’t the only thing you could lose. Unfavorable terms could leave you filled with regret once the M&A is complete. There are many more issues besides money to negotiate when selling a business. Your exit strategy planning will help you identify these.
This CEO’s Exiting Strategies guide is a great first step for anyone looking at selling a business.
Minimize or Eliminate the Tax Bite
Both buyer and seller have a shared interest in this priority. Your team needs to know how to achieve the best possible tax deal resulting from your merger or acquisition. You can’t rely on the buyer’s team for this.
Find the right people for your team of experts, and you could reap six or seven figures more from selling a business (depending on business size) than you otherwise would have.
Design and Implement Business Wealth Transfer to Heirs
Your age and family situation play a large role here. How and when you transfer wealth to your heirs has tax consequences as well as many other intricacies that must be discussed and worked out when selling a business.
During the sale of your business is the ideal time to settle some of this.
Tell You – Honestly – If You Are NOT Ready to Sell the Business
This may be the most important one of all. You need someone who will shoot straight with you, even if it’s hard to hear.
Many businesses are heavily owner-dependent. When an owner of such a business tries to sell, they can become quite disheartened to learn they won’t be able to sell for nearly as much as they think the business is worth.
This is because the new owner will not be able to replicate what the original one was doing. They may lose a large portion of their customer base, who were loyal only to the original owners.
Besides being owner-dependent, several others factors can complicate your efforts when selling a business. You need a team of experts who will be honest with you, and who have solid numbers and experience to back up what they’re saying.
So – let’s explore briefly who these business sale experts are, and what qualities you want to look for when assembling your team.
5 Business Sale Experts to Comprise Your Team
The financial advisor is your point person when selling a business. He assembles the team, collects the relevant information, and runs the meetings.
One of the financial advisor’s most critical tasks is to determine the minimum net business sale price that will help you attain the financial security you desire. How much you need to sell it for may or may not align with how much you are able to sell it for.
The financial advisor will also help you with the estate planning tasks that result from selling your business. And, once the sale is complete, he will help you manage your wealth to stay financially secure, indefinitely.
You need a financial advisor with specialized experience helping CEOs and business owners with selling a business. You do not want to pay for someone who will learn this on the job. That’s a costly way – for you – to give a newbie some experience, because they will not be prepared to effectively complete the eight tasks you just read through a moment ago.
Pillar Wealth Management’sfinancial advisors have extensive experience with the process ofselling a business. We have worked with numerous 8, 9, and 10-figure business owners and CEOs with mergers and acquisitions in the San Francisco Bay Area from Palo Alto and San Jose to Walnut Creek, and have produced stellar outcomes that kept them at ease through the process, happily satisfied at its ending, and contentedly enjoying their next stage of life.
Find Out if Pillar Has the Best Financial Advisor for Your Business Sale Team
The investment banker performs some of the most critical tasks in finding buyers for your business. She locates and qualifies your prospective buyers.
An experienced investment banker will know the players in your area or industry, have contacts she can reach out to, and have the capacity to create a ‘frenzy’ of sorts, much like a real estate agent tries to achieve when selling a property.
The right investment banker for you should specialize in your price range and know your geographical area (if relevant).Learn more about what investment bankers do.
When looking for a banker for help with selling a business, ask about things like:
– Their core services and strengths
– Past experience – especially in your industry
– What differentiates them from other firms
– If you can speak with any of their past clients
– How much they charge – the most common arrangements are monthly retainer fees and additional payments for a successful closing
– Their relationship with buyers, sellers, financers, and investors
– How their business M&A process works and why it’s superior to others
The transaction attorney is another person you must consult with before you get started selling a business.
They specialize in executing business sale transactions because they know the market, understand how to keep the deal moving, and know how to level the playing field with the buyer. The transaction attorney plays a critical role in ensuring you get a good deal when selling a business, and is your go-to player for negotiating with the buyer’s team. He keeps you from getting a terrible deal.
Accountant and Business Lawyer
You probably already have these last two core members of your business sale team. Your CPA and business lawyer know your company from the inside out, so their perspective and insight during the business sale negotiation process will be essential.
They will be able to answer questions from the buyer and make sure all your numbers, assets, and details are accurate.
A Warning about Assembling Your Team of Specialists for Selling a Business
The most common scenario will be that you’ll assemble your team, and that most of them will not have worked together before, especially on a business sale. These specialists tend to be independent. In other words, you will likely not find your financial advisor, investment banker, and transaction attorney all working at the same company. They will be operating their own offices.
The risk here is that they need to be able to come together and unite around your business sale goals, objectives, and processes.
That’s why, if you haven’t already picked up on it, finding specialists with deep experience in business mergers and acquisitions similar to yours (in industry, size, or location, whichever is most pertinent) is probably the single most important factor in deciding who to work with when selling a business.
With this experience, they will be able to quickly gel as a team, recognize each other’s strengths and knowledge, and be able to trust each other to fulfill their part of the business sale process.
On the contrary, if you have even one member who is ‘out of their league’ on your 8, 9, or 10-figure business sale deal, they will probably slow the process down and increase the stress and uncertainty of success. This will frustrate you as well as the other members of your team.
So make it a priority to carefully vet your team before hiring them.
For the financial advisor on your team, Pillar Wealth Management has extensive experience helping clients with selling businesses worth 8, 9, and 10figures.
In the course of that experience, we have developed relationships with many specialists in these other areas, and we know some who possess the high level of professional expertise you will be counting on. Depending on your business’ specifics, we may be able to recommend a few to you. Ask for Help with Your Business Sale Process
And get the free guide today– Exiting Strategies – The CEO’s Seven Critical Steps to Cashing Out Of A Business, Managing And Preserving Wealth.