Selling Your Business – How a Business Broker Can Help You Get A Better Price

Business brokers can help you get a better buyer and a higher price for your business.

I get a lot of questions about what business brokers do; when to use them and how to select one. So let’s start at the beginning. What does a business broker do for a business owner?

There are some very important things that a business owner cannot do on their own during the business sale cycle that a business broker can do.

Selling your business is a very complicated process and we like to think of ourselves as guides through the jungle. You would never try to go up the Amazon River by yourself. You want someone alongside that’s done this before.

So there are several things you want to do before the process. First, you want to maintain confidentiality. You don’t want to tell your employees or your vendors. You don’t want your competition to know. So a business broker can help you do that.

The other thing you must do during the process is continue to run your business. You don’t want to pay much attention to the sales process. You want someone else to handle it for you.

The day before a closing, the banks and the buyer will ask for the last month’s financials. And if, for some reason, you’ve been distracted or you haven’t kept your eye on the ball, and business goes down, guess what? They’re going to want to renegotiate.

And that brings me to my next point: negotiating. It’s very important to have someone negotiate on your behalf.

Pro athletes, entertainers, people who are having large transactions or are worth a lot of money understand they cannot negotiate for themselves. So they hire someone to do it for them, a pro.

A lot of times on the buy side, if your company is being bought by another company or being bought by someone who’s done this before, they’re pros.

Most business owners are not pros in negotiation or not pros in selling. And they don’t know all the things that go into it. So you want someone to be able to negotiate on your behalf. Your business broker would do that.

This is not a time for a do it yourself attitude.

And the second thing you’re going to want to do is make sure that you get the right buyer at the best price.

The only way to do that is to have competition. So you want to create competition for your deal. You can’t do that sitting in your office by yourself.

We do two things at Transworld. We network the sale through fellow professionals through our associations like the IBBA and the BBF, which is the Business Brokers of Florida.

So not only am I working on selling your business, the 90 brokers at Transworld, the thousands of brokers of IBBA are all working hard to sell your business, so that creates competition.

And the other thing you want to do is put it out there in the marketplace and all the websites; and there’s no way that an individual can join all the websites and have all the buyer flow that a business broker has.

So that creates competition for your deal, too. And that really gets it to the right price.

Business owners already have a full time and a half job, and to try to take that on is too much. I know they can bring in other kinds of advisers, but when you talk about the power of networking, it really counts.

And even beyond that, say that I found the right buyer.

We have a saying: “If you have one buyer that buyer has you”.

So the right buyer came through your door and you weren’t even looking to sell and all of a sudden this big public company comes through your door and says “We want to buy you”. Well, great, you’ve got the right buyer. And they’re willing to give you your price.

But people don’t understand that 50 percent of selling your business is finding the right buyer. The other 50 percent is getting yourself through the transaction. Renegotiations happen, sometimes even after closing.

There’s dealing with lawyers, accountants, bankers, landlords, competitors, vendors, employees, and there’s all those issues that a business broker has been through before.

Small Business Pursuit of Government Contracts

US Government awards billions of dollars every year to small businesses, so how do you differentiate and win your share of these lucrative contracts? As a small business you already have the passion and desire to deliver quality solutions to the US Government, which is an important characteristic to start with. To help you succeed, the following article discusses common pitfalls to avoid and how best to pursue the government as a small business.

Most large corporations assemble dedicated teams to go after an opportunity spanning several years, and hire specialized resources to directly approach the Hill on behalf of the organization. If your small business is capable of implementing that strategy, then by all means go ahead. However, most small business do not have deep resources to pull from and need a more focused and efficient strategy.

For a small business, the following strategy is more appropriate:

  1. Identify your core service or product to be offered before approaching the US government
  2. Identify new procurement opportunities posted by the government
  3. Establish relationships with the appropriate “buyer”
  4. Leverage your “buyer” relationship to guide your internal development process and/or influence the solicitation to better match what you can deliver
  5. Submit a complete and accurate proposal

I will assume you have already established step 1 when you wrote your business plan or similar document when forming your business. If not, search the web or seek out a mentor to help generate a business plan before proceeding.

Procurement opportunities are not difficult to find once you learn the basic steps, however, you want to avoid pursuing opportunities that are already allocated to the competition. When searching for new opportunities you want to pursue and submit a proposal for the following types, all of which are postings by the government seeking input from industry:

  • Pre-solicitation
  • Request for Information (RFI)
  • Sources Sought
  • Combined Synopsis/Solicitation
  • Broad Agency Announcement (BAA)

And avoid the following types:

  • Request for Proposal (RFP), government has already allocated funds based on an RFI or similar process and is in the final stages before awarding a contract. Since the funds are allocated, the government has already determined what and from whom to buy from
  • Intent to Award – government has determined that a sole source non-competitive award will be given to a specific company, and is formally announcing its intent for industry to protest. As a small business it is usually not worth your effort, but you will have to decide on a case by case if it is appropriate to protest and win back from a competitor

Now that you have determined what to offer and which basic types of opportunities to pursue, the following list will provide a means of locating the postings for you to evaluate and consider:

  • Federal Business Opportunities, is a free website managed by the Federal government, and is a central spot to monitor for postings. Visit the website and explore the Getting Started tab to learn how to setup an account to be auto notified when new postings match your criteria. http://www.fbo.gov
  • Combating Terrorism Technical Support Office (CTTSO) BAA Information Delivery System (BIDS) is an agency setup to help small business develop and transition new technology into production. The programs focus on technology to counter terrorism at the Local, State, and Federal level. https://www.bids.tswg.gov
  • General Services Administration (GSA) Schedules. Managed by the Federal government, your small business can apply and get a contract to deliver your solution to Local, State, and Federal agencies. However, the GSA Schedule is only a contract vehicle, you still need to find the buyer and have them allocate funds to complete the purchase
  • GSA Advantage is the companion site to GSA Schedule, which lists all of the contracts in place with pricing information for potential buyers. You can review the website for information on your competitors and assess how your product or service would compare

Up to this point we have discussed how to identify new pursuits. Keep in mind, just because you have located the perfect opportunity and can deliver what the government wants, you are not the only company pursuing the opportunity. You next need to take steps to improve the odds in your favor by leveraging what is unique about your organization. The following list goes beyond the product or service you are offering, and explores contractual as well as business aspects that will improve your chances of contract award:

  • The most important thing you can do is build the relationship with the “buyer”. By using the FBO postings identified above, you can determine which program office or “buyer” is listed in the posting, or by inquiring from the contract officer. Note that the contract officer is the gatekeeper for the opportunity and is not your buyer
  • To demonstrate your ability to deliver prior to engaging the US Government, establish past performance by completing commercial contracts. This is not essential, but goes a long way to show you are a real company and are ready to do business
  • Visit the Small Business Administration website to determine if you are a disadvantaged small business, and if so get certified as Veteran Owned, 8(a) Business Development, Alaskan Owned, etc… In this case, more is better so get certified for all that apply
  • If your product or service is appropriate for the GSA Schedule, then get the contract vehicle in place. One of the major challenges on the government side is awarding new contracts with a company. However, if you have already established a contract vehicle through the GSA Schedule, you help ease the process for your buyer. But remember, GSA Schedule is only a contract vehicle, you still need to find the buyer and the buyer needs to allocate funding to complete the procurement

In summary, we have discussed how to efficiently locate new opportunities with the US Government and steps you can take to improve your odds of winning a contract. It is now up to you to execute the strategy and feedback your success or lessons learned.

In a future article I will cover how to generate an accurate and complete proposal for submission.

Small Business Financing Advice – Best Places To Find Real Advice On The Internet

There are so many websites out there that try to give small business financing advice it is hard to judge who to believe and who not to believe. However, there are three sources that I believe you cannot go wrong with when you are looking for small business financing advice:

1. Business Association Websites - The SBA is one of the best places for small business financing advice. As a matter of fact, it is one of the sites I like to use for brand new information. The SBA often releases breaking news when a new type of financing has become available, a lender has made the news, or new options for owners looking to build a new business are available.

Plus, the SBA website is a government website so you can trust that the information is factual. There are many other business associations that give out small business financing advice, but the SBA is my favorite. There is a link button on their site for other associations if you need more information.

2. Lender Blogs - Many banks and other financial institutions are starting to contain blogs with small business financing advice on the blogs. Lenders understand that not every business owner knows everything they need to effectively start a business.

They also know that sometimes new ways of financing are released, and their customers may not be aware. The advice given on lenders’ websites are full of real, authentic, quality information. Check out your lender’s website today to see if they have a blog.

3. Previous or Current Business Owner Blogs/Websites – Often the best small business financing advice sites are those of people that have actually lived the life of starting a business. They can give you tips from their own experiences. The ‘ins and outs’ through the eyes of a real business man or woman.

The relevance of small business financing advice is especially real when you feel you can relate to the author of the blog. Perhaps their advice is being given towards the type of business you have because they currently own a business similar to yours.

These are the three types of sites I visit often when I am looking for small business financing advice for my own business. I suggest you stay clear of sites that are written by people not associated with owning a business at all.

Many people ‘on the outside looking in’ want to give their advice to you. Stick with the professionals. You can feel confident you are getting advice from people within the business.