Business Broker vs M&A Advisors, Investment Bankers or Intermediary - Who is Right for You?
What are Business Brokers and M&A Advisors and What do They Do?
If you are looking to sell your business, a business broker is the professional to turn to. They are an individual or company that helps clients buy and sell small to mid-sized companies typically found on Main Street. Their role includes working with buyers and sellers to ensure that they get the most advantageous deal possible. From getting the best price to filing paperwork and fulfilling all legal requirements, they take care of it all to ensure that everything runs smoothly.
If you are considering selling your business, you may have heard the terms ‘Business Broker’, ‘M&A Advisor’, ‘Investment Banker’, and ‘Intermediary’ thrown around. But who should you choose for the job? In this blog post, we will explore the differences between a Business Broker, M&A Advisor, Investment Banker, or Intermediary to help you decide which one is the right choice for your needs.
Business Brokers, M&A Advisors, Investment Bankers, What’s in a Name?
The terms “Business Broker,” “M&A Advisor,” “Intermediary,” and “Investment Banker” all refer to professionals providing very similar services. Business Brokers tend to focus on “Main Street” deals, while Investment Bankers concentrate on “Wall Street.” The main distinction lies in the size of the deal, with M&A Advisors and Investment Bankers working on a national and global scale. Business Brokers, on the other hand, tend to concentrate on small to mid-market deals, with values ranging from $2 million to $50 million. They specialize in helping clients buy and sell businesses that would not be a target candidate for larger private equity firms or investment banks. With expertise in valuation, negotiation, marketing, legal, accounting, and finance matters, Business Brokers, M&A Advisors, and Investment Bankers can all assist clients through every step of the transaction process.
The Role of a Business Broker: How They Can Help You Sell Your Business
To ensure privacy during this process, business brokers require any prospective buyers to pledge not to disclose sensitive details regarding the sale. Working either as an individual or with a firm, business brokers may also provide support regarding acquiring licenses and weeding out candidates that are not suited for purchase. As part of their responsibilities, business brokers specialize in:
- Provide professional valuations
- Creating marketing strategies
- Conducting interviews with prospects
- Handling negotiations competently
- Executing comprehensive due diligence
The Benefits of Hiring a Business Broker
Selling a business can be a daunting task that carries many risks and can quickly become overwhelming. Working with a professional business broker simplifies this process, as they are well-versed in:
- Complexities of company acquisitions
- Possess specialized knowledge of tax and legal matters
- Relationships with potential buyers and sellers
- Marketing the business to reach suitable business buyers and recognize when a serious offer is made.
- Free up time for you to focus on running your daily operations instead of spending valuable hours navigating through difficult negotiations or stumbling over unexpected roadblocks.
Completing the Sale at an Advantageous Price
By tapping into the expertise of business brokers, one can increase their chances of completing the sale at an advantageous price while helping to avoid potential pitfalls that could lead to financial loss in the future. These services come with a cost; business brokers are typically compensated through commissions which tend to decrease as the sales value increases. Many businesses view this as an investment in the success of their Exit Plan, resulting in a faster sale at a higher valuation.