How to Sell Your Business, page 17

Researching Potential Buyers, continued

If the buyer has bought other businesses, see if you can find the sellers. They may have interesting things to say. Be particularly careful if the selling party to a previous deal with the buyer tells a story about being manipulated into a substantially lower final price at the end than was originally agreed.

It is also a good idea at a fairly early stage to sit down with a potential buyer in a neutral setting, such as a restaurant. Most business acquisitions hit some rough spots. The purpose of this meeting should be to determine whether the buyer has the flexibility and personality structure to work past these rocky patches with you.

Working with Intermediaries

Intermediaries in the business of helping others to buy and sell businesses go by a variety of names. The most common are: Business Broker (or Broker), Investment Banker, and Consultant.

For the most part, those who call themselves brokers are lower on the totem pole, and deal with smaller businesses, than investment bankers, who are the (relatively) elite of the profession. In fact, some business brokers either started out, or still are, real estate agents who became involved in selling businesses that happened to be attached to real estate.

Consultants are more likely to be involved in specialized situations, such as helping to find the right buyer for a technology asset. (They may also perform an agreed upon task that is part of dressing a business for sale—such as writing a Business Plan.)

Whatever the label, business brokers are essentially unregulated, although there is an industry trade association (see sidebar) that provides education and certification services.

Continued next page

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