As a successful business owner, you’ve no doubt worked very hard to build your company. That’s why when the times comes to sell, you want to make absolutely sure that everything is done right. Many owners are tempted to go it alone. No one knows your business better than you, right? But we believe that’s a mistake. By hiring a reputable investment bank for the sale, you will minimize your timeline, decrease your stress, and (most importantly) maximize your value.
Just some of the many reasons you should hire an investment bank.
- Time and resources – Working to sell your business is a full-time job. By allowing an investment bank to handle the entire process, you and your management team can stay laser focused on the success of the business. Slumping performance during a sale process obviously isn’t good for anyone. Keep your focus on what you do best and allow your investment bank team to do the same.
- Experience matters – An investment bank’s deep knowledge of the market and experience selling will promise the best price and terms for your company. They know how to locate and interact with buyers, structure the transaction, and negotiate the terms with multiple parties. And while nobody knows your business better than you, investment bankers are experts in framing your business to highlight strengths and minimize deficiencies. All leading to maximum value.
- Deals can get complicated – While the sale price garners the most attention, the terms are equally important. And they can get complicated, fast. How will your shares be cashed out? What percentage of the transaction will be held in escrow? How long will a potential buyer be granted exclusivity? It can be a lot navigate and you don’t have the time. Having a seasoned investment banker negotiating on your behalf will go a long way towards the deal’s success.
- Enhanced credibility – Businesses represented by an investment bank simply have more credibility than business owners who go it alone. Working with an investment bank both increases the amount of reliable offers you receive and signals to buyers that they have to work harder to win your asset. They will also vet any offer that comes in to ensure its reliability, saving you precious time and resources.
Four questions to ask your potential investment bank.
Once you start interviewing investment banking firms to represent you, here are four simple questions you should ask to discover which one is the right fit for your company:
- “How well do you know my industry?” – Access to more qualified buyers requires relationships with key industry decision makers. Find out what they know, who they know, and how familiar they are with the competitive landscape.
- “What deals have you closed?” – This is a bottom-line business. Inquire about recent outcomes of deals that have been in play. You’ll probably want to ask about deals that fell apart too, and what exactly happened that led to unfavorable outcomes.
- “What services do I get?” Find out the exact team you’ll be working with and what tasks they will perform to manage the sale process. Will you have access to senior management? Find out.
- “What is your fee structure?” – Naturally, you’ll want to know how the bank expects to be paid. Is a percentage of the final deal value? Flat fee? Retainer? Review any and all financial expectations up front. And remember, everything is negotiable.
Selling your business is one of the biggest transactions you will ever face. The success and ease of the process is highly dependent on the team you assemble—a team of seasoned, aggressive professionals like Hyde Park Capital. For more than 20 years, Hyde Park Capital has earned a stellar reputation as highly competent and ethical investment bankers who can help optimize the value of your company in every economic condition. Give us a call and let us walk you through everything we can bring to the table.