Getting The Most from Your Broker Or Investment Banker When Selling Your Business

By Norman D. Kallen, Brown Moskowitz & Kallen, P.C.

Selling a business can be a complex and daunting task, and having a broker or investment banker to guide you through the process can be invaluable.

Here are some tips to help you get the most out of your broker or investment banker.

1. Choose the right professional: Take your time to find a broker or investment banker with experience in your industry and a track record of successful transactions. Look for someone who is knowledgeable, trustworthy, and has a good reputation in the industry.
2.  Engage an experienced M&A attorney to review the engagement agreement: Before engaging a broker or investment banker, engage the services of an experienced M&A attorney to review the engagement agreement with the broker or investment banker. Not all such engagement agreements are created equally and there are a number of terms that can be confusing and problematic. And besides, there is often room to negotiate the fee.
3.  Set clear objectives and expectations: Before engaging a broker or investment banker, set clear objectives and expectations for the sale of your business. Be specific about what you want to achieve, the timeline, and any other relevant factors.
4.  Keep communication open: Regular communication is essential for a successful sale. Ensure that your broker or investment banker provides regular updates and feedback, and keep them informed about any changes or developments.
5.  Provide accurate information: Your broker or investment banker will need accurate and up-to-date information about your business to prepare a compelling marketing strategy and valuation. Provide them with all the necessary documentation and be transparent about any potential issues or challenges.
6.  Work together as a team: Selling a business is a team effort, and your broker or investment banker is a valuable member of your team. Work together to develop a comprehensive marketing strategy, identify potential buyers, negotiate terms, and finalize the sale.
7.  Understand the fees and costs: Be clear about the fees and costs associated with the sale of your business, including any commissions or other expenses. Make sure you understand what you are paying for and that you are comfortable with the terms. Often, the agreement with your broker or investment banker will provide for a “tail”; meaning, that if you close a transaction with a buyer for some period of time after the term of your agreement with the broker or investment bank terminates or expires, you will still have to pay a fee to the broker or investment banker. This often comes as an unpleasant surprise to the business owner --- but this “tail” can be subject to negotiation.

Manage your expectations: Selling a business can be a complex and lengthy process. Be patient and manage your expectations accordingly. Your broker or investment banker can help you navigate any challenges or setbacks along the way.
 
Norman D. Kallen is a Partner at Brown Moskowitz & Kallen, P.C. and Co-Chair of their Commercial Transactions Practice.
 
About Brown Moskowitz and Kallen, P.C. 
Brown Moskowitz & Kallen, P.C. is a New Jersey-based law firm serving privately held businesses locally, nationally, and internationally. BMK provides comprehensive counsel at every stage of the business life cycle with practice areas in commercial transactions, finance, litigation/dispute resolution, real estate, land use, technology, tax, trusts and estates. For more information, visit https://bmk-law.com