Q: What is the difference between Investment Banks, Middle Market M&A Specialists, and “Main Street” Business Brokers?
A: The term “middle-market” refers to businesses typically valued over $1 million to as high as $50 million. Middle market M&A specialists/intermediaries like Gold Country Advisors are exclusively focused on these mid-sized businesses that often fall below the radar screen of investment banks, which tend to favor larger transactions because of their fee requirements.
Investment banks also know that selling small to mid-sized companies can be time-consuming and challenging work. They know that buyers of these companies are not easily identifiable, nor are they often highly sought after by larger companies. And they are acutely aware that these companies require great skill and expertise to position and sell.
At the other end of the spectrum are so-called “Main Street” business brokers. These brokers typically represent businesses valued under $1 million. They take on multiple small business listings in a defined geographic/market area and match qualified buyers with sellers. They are able to handle many transactions at a time through a staff of commission-only sales agents, but these agents often lack the larger transaction experience, credentials, national buyer networks, and professional affiliations to be effective in the middle market segment.
Q: Why hire an intermediary to sell my business?
A: As outlined in Our Process, an intermediary fulfills many important rolls that are critical to a successful transaction. Put simply, selling a business requires an intensely focused process over a relatively short period of time to maintain buyer interest and keep the deal moving forward. One of the biggest reasons for deal failure is lack of follow-through with prospects and/or what we call “deal fatigue,” which is when the process drags on without purpose, looses momentum, and ultimately stalls for lack of interest. A good intermediary keeps the process on track.
In addition, selling a business can be an emotional and stressful time for the owners. A good intermediary ensures the process is coordinated smoothly, with arms-length contact between buyer and seller so as to minimize potential conflicts. The biggest mistake an owner can make is to neglect his business while it is being sold, causing revenue and profits to erode. This is a sure “deal-killer,” as no one wants to buy a business perceived to be in decline.
Q: What about confidentiality?
A: Maintaining confidentiality throughout the sales process is of paramount importance. Owners do not want employees, their customers, vendors, and the general public aware their business is for sale. Gold Country Advisors adheres to a strict policy of not disclosing the business to anyone outside of our office other than the buyer prospects we are working with who are legally bound to maintain confidentiality under a signed non-disclosure agreement.
Q: What are your fees?
A: Professional representation more than pays for itself, particularly when it comes to navigating through the complexities of a business sale. As outlined, each business requires a customized approach. Our fees will be addressed in a proposal for services after our initial meeting to better understand your requirements.
Q: How long will it take to sell my business?
A: In general, it takes at least four to six months to sell a business, and that assumes that everything goes according to plan. In some cases, however, it can take a year or longer to find the right buyer. In this business, patience truly is a virtue.