If you’re like most business owners who are new to the selling process, you probably have tons of questions for business brokers. I’ll shed some light on four that I hear time and time again.
Navigating the selling world can be daunting, especially for the uninitiated. That’s why business brokers exist. Hopefully by answering these questions, you’ll have a better understanding of what lies ahead, and how we can help.
Four Questions Print Owners Ask About Business Brokers
1. How does a business broker find a buyer?
A solid network provides the foundation for any reputable business broker. That requires connections, industry knowledge and experience.
I’ve been closing deals - for myself and others - for more than 35 years. I know the printers, the end users and the supply chain of the printing industries. As such, I’ve made hundreds, if not thousands, of connections over the years, many of which I regularly keep in touch.
Part of what helped me was changing the way I viewed the competition in my younger years. I had an attitude shift. Rather than viewing as competition, I looked at others as possible connections and educators. I knew that I could learn from them, and knew the potential for future collaboration.
Now, because of my relationship with these industry leaders, I can safely say that I have more qualified buyers than I do profitable sellers. And one thing’s for sure - industry leaders are always looking for growth and expansion. When a seller comes knocking, I strategically align them with the ideal buyer that will take their company to the next level - and pay a fair price.
It’s difficult to give an exact timeline, but the ultimate goal is to complete a deal within 4-6 months from concept to post-close. Just recently, I actually closed an $8 million deal in four months, start to close. We sold both the print business and the customized real estate, plus we helped facilitate the key management employee contracts.
For many business owners, 4-6 months is much quicker than they’d expect. That’s why I recommend preparing yourself to understand the steps in this major transition. Don’t underestimate this emotional preparation phase either. Sometimes it can take a couple of years. If you don’t come to me prepared, the process will be overwhelming.
3. Is it better for me, a print owner, to use a local business broker rather than an industry consultant?
That depends on several things. Given that 75 percent of deals fall apart before, during or after the deal, you’d better choose wisely.
Ask yourself these questions: Are you a member of a print industry association? Who do they recommend? What are your revenues from the last three years? What is your niche? How much are you willing to invest to sell your business? A local business broker doesn’t understand the complexities of these strategic deals, and deals fall apart if they aren’t done right.
The reason being that local brokers may be generalists and focus on the deal, rather than the big picture and post transaction. They might cost a lot less, but they’re not nearly as targeted or strategic as an industry consultant.
Think of it like fishing. A local broker might cast a thousand lines into the ocean, hoping that something - anything - will bite.
An industry consultant, on the other hand, will look for a pond filled only with the type of fish you want to catch. Then, they’ll select the proper bait based on those fish, so they can get you exactly what you’re seeking.
The LaManna Alliance also has a holistic process. We prepare you for sale, we educate you, we strategically position your business and walk you through the whole process - from concept to completion. We even help you with the post transition, making sure you’re passionate about your personal life and fulfilled in your legacies during retirement.
Absolutely. In fact, an on-site visit is rarely required for an accurate and detailed valuation.
Think about the purpose of a business valuation for a moment: To present information of how you stack up against the competition. The first thing a buyer wants to know? The numbers.
Valuations always begin with the quantitative, which focuses on factors like profitability and scalability. Those are the primary indications of your business’s value. Those are the things that make a buyer’s ears perk.
Of course, a buyer will want to know about your facility eventually, but only after they’ve seen the numbers. At the end of the day, even a facility that functions like a well-oiled machine can’t overshadow a business that doesn’t generate cash flow.
I know I’m probably only scratching the surface here. If you have further questions, start by checking out my other blog posts. If your questions still haven’t been answered, feel free to reach out. I’m happy to discuss any questions you might have.