What’s the True Cost of Selling a Business?

Selling your business is a major life decision and shouldn’t be taken lightly. Whether your business brings in $100,000 a year or $100,000,000 a year, navigating a sale can be a difficult and time-consuming process as there are many steps involved in a successful sale. If you have any friends or colleagues that have went through a sale of their business, they will tell you the same thing as most business sales processes following similar steps.

Business owners can be caught off-guard as they learn of the various expenses involved in selling their business. The selling process should be extensive and may include expenses attributed to accounting, legal, estate planning and advisory services. Advisory services aren’t always required for a sale but will often unlock additional value in the business, ultimately achieving a higher sale price meaning more money in your pocket at the end of the day. An advisor can help guide you through the sale and introduce you to buyers that may not have been on your radar. It is important to align yourself with an advisor you can trust as they will be assisting in the necessary steps to help you meet your financial goals of selling the business.

As your advisor, SchoolWise Partners is here to guide you through the sale process, a.k.a. the Merger and Acquisition process. Our responsibilities include:

·         Identifying the Sellers Goals from the Transaction

·         Preparing the Business Valuation

·         Marketing the Business to Potential Buyers

·         Managing the Sale Process

·         Negotiating the Transaction

·         Overseeing all Due Diligence

·         Negotiating Definitive Agreements

·         Overseeing the Transition of the Business

Fees associated to working with an advisor can usually be broken up into retainer or working fees and a success fee. Typically, investment bankers will have a retainer or working fees for the time required to sell the business. Portions of this fee are normally credited towards the success fee upon closing. The success fee is usually a fixed percentage of the transaction price, meaning that the actual monetary value will vary depending on the final sale price but the percentages are fixed and outlined in the engagement contract with the advisor. For a modest transaction, you should expect to pay around 10% – 12% of the total sale price.

If you’re interested in exploring the option of selling your business or simply want to learn more information about a possible sale down the road, feel free to contact us at info@schoolwisepartners.com or give us a call at 305.646.9970. We look forward to helping you achieve your financial goals.