By: Mike Bloom & Josh Bennett
Selling a business successfully requires the business owner to maintain focus on operating and growing the company throughout the sell-side process.
Your transaction team will be your think-tank throughout the sell-side process – from day one until the transaction closes. Each member of the team possesses specialized knowledge in the areas that need to be thoroughly understood to help you reach your personal and financial goals.
A well-assembled transaction team includes:
- Certified Public Accountant (CPA)
- Wealth Manager
- Spouse and Family
- Investment Banker
Certified Public Accountant – A CPA will ensure timely production of current financial statements for the transaction team and during due diligence for the buyer to review. Your CPA will also provide insight into the tax implications of the terms found in the letter of intent (LOI).
Your CPA will help you calculate how much you will net after considering taxes, liabilities, fees, and other transaction costs to understand if the proceeds from the sale will be enough for you to achieve the financial goals you set. An experienced CPA will help you minimize the effect of taxes and liabilities and increase your proceeds at closing.
Attorney – Attorneys who specialize in transactions work closely with the seller, investment banker, and other members of the transaction team during the transaction.
The attorney will draft, edit, and review the language expressed in many of the transaction documents, including the non-disclosure agreement (NDA), the letter of intent (LOI), and the purchase agreement.
The attorney will also collaborate with your CPA to explore the tax consequences of different legal structures to find the optimal legal structure for your transaction.
Lastly, the attorney will identify and help you address areas of risk for the buyer. Surprise areas of risk discovered during due diligence may hurt your negotiating position with the buyer and lower the purchase price.
Every business will have blemishes, but eliminating surprise areas of risk and creating a turn-key business for the buyer will strengthen your negotiating position and increase your company’s value.
Wealth Manager – Wealth managers are trained to use legal and financial advice to assist you with managing the wealth you have accumulated after exiting your business.
Before a transaction, your wealth manager will analyze your entire portfolio to determine whether or not the proceeds you receive from a sale will be large enough to sustain the post-sale lifestyle desired by you and your family.
With a surplus of cash after your transaction closes, your wealth manager will actively manage your assets by investing your cash into investment products that protect your wealth, help it grow, and ensure your household cash flow continues to meet the needs of you and your family in your new lifestyle.
Spouse and Family – Before making the decision to sell your business, you need to discuss the decision with your spouse and family.
Your spouse and family are the most important members of your transaction team, so it is important that their needs are considered and the decision is made together.
Your income and a large percentage of your wealth is likely tied to your business that you are contemplating exiting, so the impact of a sale will be felt by your spouse and family.
Before making the final decision to sell your business, it is appropriate and wise to consider the needs of your family and gain their approval.
Investment Banker – There are at least six reasons an investment banker adds value to a transaction, and those can be read about it in this article.
Final Remarks on Your Transaction Team
Selling a business is a complex activity with a lot of moving parts, with each member of the transaction team playing a decisive role in a successful transaction. The transaction process is an orchestrated effort between a seller and each of the professionals in their transaction team.
A well-prepared seller begins to assemble and surround themselves with a trusted team of advisors before they are ready to sell. During the sell-side process, the seller continues to lead their business and help it grow, while the other members of the transaction team unify their skillsets to help the seller reach each of their personal and financial goals in the transaction.
A seller should never go it alone.Have you already surrounded yourself with a trusted team of advisors? Do you think you are ready to sell your business? Take the Seller Readiness Quiz to see if you are ready to begin the sell-side process.
About Piedmont M&A Advisors
Piedmont M&A Advisors is a boutique investment banking firm specializing in buy-side and sell-side transactions for businesses with revenues between $10 million and $200 million. We also provide capital raising, valuation, and strategic advisory services.
To learn more about Piedmont M&A Advisors, or to discuss questions you might have today about selling your business, contact us today for a free consultation.