Why Your Accountant Should Not Sell Your Business

I recently attended a conference full of accountant’s and CPA’s who do business valuation work for litigation and IRS gift tax calculations.  They tend to work for accounting firms.  Most are very good at business valuation.  But do you really want your accountant selling your business?

Considering Selling Your Business? Please click here for a downloadable e-book, “ 10 Ways to Increase the Value of Your Business“.

A few comments as regards to selling businesses and M&A:

“The owner of the business came in and demanded that I renegotiate the price when I already had a handshake.  I could not do that.”

Welcome to doing a brokers job.  For better or worse in the deal world negotiations never end and flexibility of the intermediary is essential.

 

“The sales value was $50 million.  We found a buyer and negotiated the deal.  My fee was $75,000.  Far less than a brokerage fee would ever be.”

Yes but how do you know you got the highest price.  You know you saved a fee but at what cost in sales price?   There was one buyer with one offer.  Whoever bid high when they were the only game it town?

 

“We negotiated back and forth from the projections that the buyer demanded”

Really, talk about a zero sum game.     Every comment, every move is an opportunity for the “returns” to the buyer and price to the seller to go down.  Again the way out of this box is to find a second buyer prospect.  That will add positive fire to the negotiation.  But, what accountant ever found more than one buyer prospect at a time?

 

I love my accountant valuation friends.  They are very qualified to do taxes, prepare financials statements and audits, and perform business valuations.  Accountants and CPA’s practicing out of accounting practices are not business brokers.  Few know how to attract and negotiate with more than one buyer which is the surest way to increase business sales price and value through the business brokerage process.

Hire a business broker to do a brokers job.   It’s just that simple. 

Gregory Caruso, Esq., CPA, CVA
Harvest Business Advisors
Business Brokerage, Business Valuations, Succession Planning
Maryland, New Jersey, Pennsylvania
gcaruso@harvestbusiness.com
609-664-7955

Business brokers credit growth of business sales to active business buyers

Biz Buy Sell, www.bizbuysell.com  just released a research report based on a nationwide survey of business brokers.  The report polls business brokers views on the current business sale market for main street businesses.  The findings are consistent with what we have been experiencing as business brokers in Virginia, Maryland and Pennsylvania.  The report on the current outlook for selling businesses found; 1.   Buyers are back which is fueling sales.  2.  Seller financing is essential to getting deals done.    Read the report for yourself.

Considering Selling Your Business? Please click here for a downloadable e-book, “ 10 Ways to Increase the Value of Your Business“.

Gregory Caruso
Harvest Business Advisors
Business Brokerage, Business Valuations, Succession Planning
Maryland, Virginia, Pennsylvania, Southern New Jersey
gcaruso@harvestbusiness.com
609-664-7955

Maryland Business Broker Quoted in Selling Your Construction Company Article in Equipment World

Experienced Business Broker, Gregory Caruso, Esq. CPA, CVA, was quoted in the informative article “How to Choose Who to Sell Your Construction Company To” Article in Equipment World.  Greg advises to start early, create a succession plan, and of course, be profitable.  Read the Article at http://www.equipmentworld.com/special-report-future-part-4/.

Want to know more about building value and selling your construction company – Click here to download a 20+ page e-book. 
 
Gregory R Caruso, JD, CPA, CVA
Harvest Business Advisors
Business Brokerage, Business Valuation, Transaction Planning
Baltimore, Columbia, Bethesda Maryland, Princeton NJ
609-664-7955
www.harvestbusiness.com

Baltimore Business Broker to Speak at American Subcontractor Association Conference in New Orleans

Gregory Caruso, Esquire, CPA, CVA a principal at Harvest Business Advisors will be speaking at the National Subcontractor Association Meeting, Sub-Excel, Saturday March 8th 2014 in New Orleans.  Greg will cover the topic Family Transition and Family Business Succession in Subcontracting Businesses.   The presentation will focus on how to avoid pitfalls that destroy family businesses and sometimes the families themselves.  Greg has been involved in 100’s of business transitions as a principal, attorney, broker, and valuation professional.  Before becoming an advisor on succession matters for sub-contractors, suppliers, and engineers he grew up in a family contracting company and later co-owned another family construction company.

Want to know more about building value and selling your construction company – Click here to download a 20+ page e-book. 

Gregory Caruso, JD, CPA, CVA
Harvest Business Advisors
Business Brokers, Business Valuations, Business Succession for
Sub-Contractors, Construction Contractors, Suppliers, and Engineering Firms
www.harvestbusiness.com
609-664-7955

Ways to Generate Qualified Prospects – Business Brokers, Intermediaries, Investment Bankers, M&A Specialists

Let’s talk about ways to generate prospects on your own , or by business brokers and business intermediaries as described below.

Business Brokerage.  According to industry statistics, only 30% of Buyers purchase the type of business they first start calling on, and this number increases with smaller businesses.  This is one way brokers add value.  Brokers can take callers who decide they are not interested in the first business and move them to another businesses they have for sale.  A broker with many different businesses can move a prospect through many opportunities.  This is particularly important if your business is unlikely to generate phone calls directly either because of the business type or because of business conditions.

Intermediaries, Investment Bankers, and Merger and Acquisition Specialists are all brokers and advisors with different networks and abilities.  As the transactions get larger the advisory aspect of a broker relationship increases in value to the Seller.  It is likely that good advice will increase the final value by at least 15% above the original starting value.  It may not be worth paying a consulting fee on a $100,000 sale but for a ten million dollar business, that is a whole different ball game!

In general, “business brokers work with businesses up to about $5,000,000 in value; intermediaries handle businesses worth between $2,500,000 to $10,000,000; and investment bankers and merger and acquisition specialists manage the $5,000,000 to $50,000,000 on up crowd.  Still, there is a lot of overlap between the groups at the edges.                         

Co-brokerage.  Many brokers co-broker with other brokers they trust.  Since confidentiality is so important a good broker will not send your confidential file to just anyone.  The prospect must be qualified first.  A good broker is always concerned with respecting and protecting the Seller’s confidentiality.  A few brokers will sell an unlisted business but, historically, many of these brokers have not been paid, so many refuse to sell an unlisted business or a business with an open listing.  Every broker keeps a list of active Buyers which makes co-brokerage a useful technique particularly for smaller profitable businesses.

Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver the highest price in the smoothest sale transaction possible. Harvest 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 Greg to discuss selling your business, ordering a business valuation or buying a business.

Gregory R. Caruso, JD, CPA, CVA
Harvest Business Advisors
Business Brokers, Business Valuation, Business Transactions
609-664-7955
gcaruso@harvestbusiness.com
www.harvestbusiness.com
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