When selling your business it is important to select the correct sales team, the business broker, transaction lawyer, CPA, and financial advisor that are going to work with you to “get the job  done.”

Now that you’ve thought about selling your business and what you need to do to get ready, it’s time to think about the team that will get you to the finish line.

By their very nature, business sale transactions are complex. They require a deep understanding of a broad range of activities from sales and marketing to technical tax rules. For this reason, most transactions require a sales team to ensure the best outcome for the Seller.

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So who is on your business sale team?

Obviously, a seller and a buyer. Then your business accountant and your attorney.  And, of course, a business intermediary or business broker like the people on the team here at Harvest Business Advisors.

If your business has complex business assets, you may want to bring on a tax expert. And possibly a business valuation expert – as we discussed in the last post – to help you understand the value of your business.

But how do you know when or if you need outside assistance?  And if you need outside assistance then just when you need it?

Let’s take a look at the members of the team.

Accountant or CPA

The accountant plays a vital role in any sale by reviewing or preparing the documentation that the valuation is based upon.  Further, they are responsible for auditing, reviewing, and preparing the financial information used to negotiate the transaction.  They are involved in tax planning and ensuring that the after-tax financial results you seek can be obtained.  They often participate in due diligence and problem solving.  The accountant’s role is to make sure that financial information is accurate and that tax consequences are minimized.

You’ve most likely worked with an accountant over the years and assuming that you have, this person will have all the financial information you’ll need to present your business to potential buyers. This will be one of the first people that you work with.


Attorneys are often viewed as the deal breakers.  However, this is not the case when you use an experienced attorney who is familiar with business sale transactions.  The attorney’s job is to protect you as much as possible, and to make sure you understand the deal’s risks and what escape routes may exist if things go wrong. They may make you feel uncomfortable but it’s their job to focus on the ugly.  You must make the final decisions.  All business activity and actions, including when you sell your business, is a series of risk and reward equations.

Business Broker

Brokers go by many names, Business Brokers, Investment Bankers, Intermediaries, Acquisition and Merger Specialists.  These people perform a variety of functions — usually anything not being done by another specialist. The primary goal of a broker is to increase the sales value of the business through appropriate planning, marketing, sales, and negotiation during the sale period.  The International Business Brokers Association estimates that Business Brokers on average add 15-20% to the value of a transaction.

Brokerage fees are usually a percentage of the transaction value and that percentage usually decreases as the transaction gets larger.  Often there is also a minimum fee.  A common fee structure for a small transaction might be the higher of a $15,000 minimum fee or 10% of the sales value.

Sales value tends to include cash, liabilities assumed, non-competes, owner’s compensation — in effect, every way the seller is making money from the transaction.  Commissions tend to be collected in full on notes taken back by the seller at settlement.  If an earn-out is involved, the commission will typically be paid as the money is received since it is speculative.  In many cases the broker will barter a reduced fee on earn-outs for payment at settlement to simplify everyone’s accounting.

On larger transactions, the minimum fee might be $75,000 and a fee schedule of 10% on the first million, 8% on the second million, 6% on the third million, and 4% above that.  This is known as the double Lehman.  Very large transactions over $10,000,000 in sales value are completely negotiable.    Just remember the important question is not what does the service cost you, it is how can the broker help you make or keep the most money after paying all expenses.

 Valuation Expert

A valuation expert is sometimes independent, and sometimes associated with the broker or accountant.  The valuation expert’s job is to make sure you understand how potential Buyers will view your business.  Typically, they produce a financial analysis based on your Seller’s discretionary earnings or EBITDA, and the likelihood of those results continuing.  Well done valuations can cost anywhere from $2,500 to $15,000 for most small to mid-sized businesses.  Make sure you understand exactly what the valuation expert is doing in term of standards.  For a market sale, often a limited use valuation that leaves out some of the general economic analysis and endless text explanation will be sufficient and save you money.

In conclusion, each of these team members understands a part of the whole transaction process and each has experience assisting people in your situation. By combining their expertise before, during, and after the business sale process, you dramatically improve your financial results and reduce your risk.

This article was written by Harvest Business Advisor Partner Greg Caruso, J.D., CPA, CVA


Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia.
Connect with us at info@harvestbusiness.com or 443.334.8000 to discuss selling your business, ordering a business valuation or buying a business.