In many cases the answer is “No.” There is no legal requirement that a business must be sold through an intermediary, and indeed, many thousands of businesses are sold every year without one.
If the buyer is a family member or a trusted employee, and the value of the business is mutually agreed upon, and the seller is going to carry most of the financing, the sale may be structured and overseen by a closing attorney, who is acceptable to both parties.
On the other hand, if the seller needs to realize the maximum possible proceeds from the sale to fund retirement or other plans, and doesn’t want to carry much of the financing, or if the buyer has a different opinion about the value of the business, then the seller may be well advised to engage the services of a qualified M&A advisor.
A qualified M&A professional can assist both parties in determining the fair market value of the business, and if need be, can set up a more competitive environment to attract other buyers based on the company’s merits as an investment. A qualified M&A advisor can also assist the buyer in identifying possible sources of financing for the deal to minimize – or even eliminate – seller financing.
Finally, a qualified M&A advisor serves as a facilitator and a buffer in the sometimes awkward and time consuming negotiations, freeing the seller to stay focused on running the business, and minimizing the risk that key employees, customers and suppliers will learn that the company is for sale.
If you know of a business owner who’s thinking of selling or buying a business and who might benefit from a free consultation with us, have them contact me, or any of the M&A professionals at www.bradwaygroup.com
By: Mike Ertel, Transworld M&A Advisors