How Do I Sell My Business?

By: Art Lennig, CBI, BCI Murphy Business & Financial Corporation – Georgia, Inc.

Part I: The Advisory Team

How do I sell my business? This is a question that many business owners ask themselves. What do I do? Where do I start? What do I need? What is my business worth? How do I compete against the many businesses for sale? Great questions, but where do I get the answers? I wish I could say there are simple solutions but there are none. Selling a business is an art, not an exact science. It takes time and patience. Pricing is critical – too high and nobody will look at it, too low and everyone will wonder – “What’s wrong?”. The goal is to maximize the value of the business yet sell the business for a fair price that works for both the seller and the buyer.

There are many things that a business owner should be concerned with when they have a business to sell:

  • Confidentiality
  • Tax liability
  • Sharing of information
  • Liabilities
  • and on and on.


How do we protect ourselves against these concerns?
Whenever a business owner wants to sell their business, they should assemble an advisory team. This team should consist of: The Owner, The Spouse, Business Broker, CPA, Attorney, Financial Planner. Let’s take and discuss each one and the purpose and experience each needs to bring.

The Owner, Spouse, and other family members – These should be obvious, however many times the owner does not include the spouse and family members in the decision-making process until the end only to find out that not all are agreeable to the sale.

Business Broker – This is the most critical member of the advisory team. The business broker is the quarterback, the general contractor, the facilitator, etc. Their role is multifaceted: Consistently communicate with the owner and spouse as to what is happening with the listing and also what is happening in the market. The Broker should gather all the documents that will be presented to the Buyer. These documents will vary by each business but in most cases will include; Tax Returns, Financial Statements, Lease, List of Assets included in the business sale, List of Assets NOT included in the Business Sale, and more. A professional Broker will want all the information at the beginning of the conversation to make an assessment of your business.

Many Brokers recommend or require a third party business valuation. This is done to determine the fair market value of the business, give you a planning tool to discuss with your CPA and Financial Planner, and also a tool for the Broker to use with those Buyers who want to buy a business during the negotiations. The Broker will (or should) put together a “Package” about the business which at some point will be presented to the Buyer. Professional Brokers prepare these packages and include all the information the Buyer will need to know. Unfortunately the less than professional Brokers do not prepare much more than a cover sheet (with little information) and a tax return. There are two different approaches here: The professional approach is to thoroughly educate the Buyer before bringing the Buyer to the business. The less than Professional Broker uses the “spaghetti theory” – keep parading people through the business in the hope that something will happen. The Professional Broker only brings qualified serious buyers to the business. They do not want to waste the owner’s time with buyers that are not ready to buy. Yes, the better Brokers do require some money before listing the business. This money is usually required to cover the costs of the valuations and other expenses the Broker incurs upfront.

The CPA – This person is critical to the advisory team. This is not always the owner’s CPA as they must be knowledgeable in Business Sales. You want someone that understands the business transfer process, can look at your financial information and provide you with the necessary advice in order to accomplish the sale. Many times the CPA will advise against the sale because it is the “safest” advice he can give. You must use a CPA that has experience in Business Transfers. Once you have the Business Valuation done, you will want to discuss it with the CPA. You want to know where you will be (How much money you will receive) after taxes.

The Attorney – Similar to the CPA, this advisor must have experience in Business Transfers. You do not want the attorney that drew up your will or handled your divorce. An experienced business attorney will protect you through the closing process yet get the deal done.

Financial Planner – This is your Financial Planner. After you have discussed the tax liability with the CPA, you now want to meet with your Financial Planner to discuss the possibility of your being able to live the life style you desire after the business sale. It is most critical that you know this before you ever list your business for sale.

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