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?
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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