Professional Support During a Business Sale
Choosing qualified professionals and vendors to support business operations is just as important as choosing the right local professionals to support a business sale transaction. But how do you know how to choose the right professionals to help you sell your Colorado small business and whose services do you even need to retain? In this article, we will outline who can help you sell your business and what they bring to the table.
Start with a Transactional Advisor
A transactional advisor, or business broker is a professional who specializes in the valuation, marketing and sale of small businesses and holds the necessary licensing to complete an M&A transaction. In addition to a business broker, a transactional attorney, and a wealth manager will provide much needed service and insight during the sale process.
What can a business broker help with in selling my business?
Business brokers specialize full time in helping business owners exit their Colorado businesses and they have access to the tools, resources, and network necessary to sell a business.
Licensing & Certification
Depending on the state, business brokers are required to be licensed real estate agents. Colorado is a licensing state, so our business brokers are all licensed real estate agents. This means that our Colorado brokers have to meet continuing education requirements to retain their license in the long term.
There are also industry certifications business brokers can attain through organizations like the International Business Brokers Association (IBBA). Our Denver brokers attain certification as a Certified Business Intermediary (CBI). This is a prestigious designation that identifies an experienced and dedicated business broker who has proven professional excellence through verified education and an exemplary commitment to our industry.
These licenses bring forth a business broker’s focus on core competencies that include an excellent understanding of pricing strategies, how to market and present a business for sale, financing, negotiation strategies and managing confidentiality through the sale process.
Colorado Resources & Network
Working with a business broker to sell a Colorado business also gives you access to a plethora of resources. Resources including multiple databases with sales comparables, business valuation tools, and numerous business listing websites. In Transworld Business Advisors’ case, we’re part of a network of more than 225 offices worldwide, which means we have a pool of business brokers experience to draw from on each transaction. Which multiplies with the partners like attorneys, wealth managers, private equity groups, and so forth each broker is connected to.
Finally, business brokers have access to buyers. This is critical to getting a transaction closed, because you can’t sell a business without a buyer. Selling a business on your own, is very limiting as far as access to buyers which can prolong the sales process and may force a business owner to sell at a purchase price they’re uncomfortable with.
Industry Associations & Continuing Education
Another benefit of selling a business with a reputable business broker, is that brokers hold memberships with industry organizations that provide resources, cobroking opportunities, and access to up to date continuing education. Our business brokerage firm is a member of the Colorado Association of Business Intermediaries (CABI) and the International Business Broker Association (IBBA). We’re also members of the Denver Metro Chamber of Commerce and similar small business entities.
Business Valuation Experts
Part of the magic of a business broker is their ability to build a pricing strategy for a business that is in line with the market and what buyers are willing to pay to get a business sold. This is very important for sellers who are serious about selling their company and want to keep up with the forward momentum of the sale process. In addition to expert pricing strategies, business brokers understand the key value builders of a business and can help owners prepare their business for sale to ensure they receive the best return upon exit.
Why do I want a lawyer when selling my business?
A transactional attorney is mainly required during the offer through closing process. The attorney will support contract assignment, entity setup and registration and serve as the escrow agent for the good faith deposit and later to distribute closing funds. Bringing your own attorney to the transaction is actually unnecessary as reputable business brokers have established relationships with quality attorneys that understand transaction deals and fit well with their business sale process.
What can a tax planner or wealth manager do in helping me sell my business?
When an owner is considering the sale of their small business in Denver, they should work with their tax planner or wealth manager to help them prepare for taxes incurred by the sale and understanding the return they need for their goals after closing. These professionals should be engaged early in the process so they can implement possible tax mitigation strategies in support of the business owner.
To learn more about selling a company and the professionals an owner should retain to navigate the sales process, schedule a free consultation with a business broker or visit our website to learn more.
Rachael Holstein has been the Marketing Manager for Transworld - Rocky Mountain since 2016. Her work experience has been largely focused on business development and marketing in business brokerage, finance, architecture, property management, and information technology. A long time resident of Cleveland, Ohio, she attained her undergrad from John Carroll University and her Master’s Degree from Cleveland State University. In 2013, she relocated to Denver with her husband, Joe, and her furry companions to explore the mile high lifestyle!