If you are selling your business, you have a number of choices on how to market your business for sale. You can try to sell it yourself (“for sale by owner”) or you can use an M&A advisor (also sometimes referred to as a “business broker”) to sell it for you. Why not simply try to sell the business yourself? The clear benefit is that you save on commission and that can be quite a large savings. However, I do not recommend the “for sale by owner” method for many reasons. Firstly, selling a business is a skill in and of itself which is different from the skill of running a business. Most business owners do not have the skill to sell their business and even if they do, they are too close to it emotionally to do a good job. If you sell the business yourself, will you know whether or not you received the right price? In my opinion, you want to get as many interested buyers as possible. Since buyers routinely contact M&A advisors to assist them in locating a good acquisition target, they know where most of the buyers are. The M&A advisor will look objectively at your business, tell you what you need to do in order to get the highest price and will then go to work marketing the business to potential sellers.

There are significant benefits to sellers in using the services of an M&A advisor. Much of the background work you would otherwise have to do to sell your business will be done for you. For example, the M&A advisor will put together the marketing documentation and the dossier of information that buyers will expect to see. As a lawyer, I like to see M&A advisors involved in transactions because often “make” the transaction happen. Sometimes tough issues arise that need compromise and while lawyers can assist in this, there is nothing better than having a “mediator” there to smooth out the rough edges. I have seen M&A advisors play this role well.

However, one of the best reasons to use an M&A advisor is that they can get you a higher price for your business. By running a process that brings more buyers to the table, the M&A advisor creates competition among buyers that results in a higher sale price for you. In one transaction I was involved in, my client told me that he had tried for a number of years to sell the business on his own. Ultimately, he hired an M&A advisor and the sale occurred. When he told me to pay the M&A advisor his six figure fee, he also told me that the M&A advisor had achieved a price increase of over a million dollars! He was ultimately very happy that he engaged the services of an M&A advisor.