An entrepreneur selling his business is probably selling the biggest deal of his life. And those that ponder overselling their companies are not necessarily doing it out of financial compulsion; many of them are either retiring, burnt out or looking for bigger and better opportunities.
It is estimated that by 2025, most baby boomers would have sold their businesses to the next generation, causing the biggest transfer in businesses history.
Understandably, many business owners prefer to use the services of a broker to advertise and sell their companies to help them maximize valuation and experience a smooth and easy transfer. However, not all third parties are the same, if ever you are looking for one to help exit your business, choose them with care.
Darren Fell, CEO at Church Accounting, feels that the experience and expertise that a broker brings to the table, taking care of all your personal interests, is truly worth your money. Yes, they come with a price, but a committed broker is not a mere middleman. They can walk you through the process, prepare the company for sale and create a competitive environment to help get the most money possible, which otherwise would have been an incredibly complex one.
Choosing the right broker largely depends on the size of your company and the services a brokerage firm provides. If you have been struggling to choose the best company to sell your business, here are nine suggestions we have for you.
For Companies with Revenues under $100 million
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For small and medium-sized businesses with revenues under $100 million, boutique brokers are the best bets. Today, boutique brokers are becoming as smart and as competitive as some of the big names in the brokerage firms.
The following criteria will help you determine whether to go for boutique brokerage or not.
Deals: Generally the deal sizes are between $0 million to $100 million.
Geography: Boutique brokerage services are best if you have to sell a business that is location-specific or within a city.
Services Provided: They generally provide only brokerage services. If you are looking for some assistance with financing or raising capital, you may have to look for other options.
Top Boutique Brokers
1 – Raincatcher
Raincatcher is one company to look for, if you are wanting to obtain maximum value for your business when selling. With licenses to sell companies in all 50 US states and its proprietary selling framework the Colorado-based company can bring you buyers that are specifically searching for businesses like yours.
2 – Murphy
With a proven track record of successful business closings, Murphy is one of the leading boutique brokers in Florida. Besides buying and selling businesses, Murphy can help in evaluating your company, appraising machinery and equipment and a host of other business consultations.
3 – First Choice Business Brokers
First Choice Business Brokers is one of the leading business sales brokers in Nevada and the one to go for if confidential selling is your priority. From selling a business to evaluating a company to leasing services, the brokerage firm does it all with professionalism and commitment.
Middle Market – For companies with Revenues in the $100 – $500 million range
Businesses with revenue generation of $100 million to $500 million must look for brokerage firms that are bigger than boutique brokers but smaller than ‘bulge brackets’ – they require middle market brokerage firms.
If you are unsure whether or not to choose ‘middle market brokerage firms’ for selling your business, the criteria below can help you make up your mind.
Deals: Middle-market brokers generally work on deals that are worth $100 million to $500 million.
Geography: They generally operate in multiple cities but are not spread globally like the Bulge brackets brokers. Hence, if selling your business requires national interests but no international affairs, middle market brokers would be great for you.
Services Provided: Middle market brokerage providers generally offer full range of services including M&A advisory, raising debt and equity, restructuring and other services. They generally help you with the best buying and selling practices and assist in providing the funds to make it happen.
Top Middle Market Brokers
4 – Houlihan Lokey
Houlihan Lokey is one of the few publically listed Middle Market Brokers. The New York-based company specializes in merger and acquisitions, restructuring, capital markets, fairness valuations and opinions. Houlihan Lokey is a great choice for private property sellers, public companies, and selling of family businesses.
5 – Sandler O’Neill and Partners
Sandler O’Neill and Partners, the company with its headquarters in New York, is a full-fledged investment banking firm and brokerage dealer. The long list of services is offers include capital markets, merger and acquisitions, sales and trading, management of balance sheet, mortgage and finance consultation. If you are selling a medium-sized company, Sandler O’Neil and Partners is the one to seek help from.
6 – Rothschild & Co
Rothschild & Co is a banking firm that offers financial advisory services to medium-scale businesses. It also provides divestitures, mergers and acquisitions, privatization, initial public offerings, negotiation execution and transaction closing services.
Bulge Bracket – For companies with revenues over $500 million
Bulge Bracket brokers are for the giant businesses with revenues of 500 million dollars and upwards. These brokerage firms are generally known for their extensive security measures and other benefits they offer to enhance buying and selling experiences of business owners.
So, do you really need these high-end services for selling your firms? Here are some criteria that help you decide.
Deals: Generally, Bulge Bracket deals are above $500 million and more often than not in the billion-dollar valuation.
Geography: They are worldwide which means if you are looking to sell your business abroad or have international interests, bulge bracket brokers are the one to look for.
Services Provided: Generally bulge bracket brokers not only help entrepreneurs buy and sell companies but they also provide asset management, commercial banking, insurance, trading and other services.
Top Bulge Bracket Brokers
7 – Goldman Sachs
Goldman Sachs is the top dog in the Bulge bracket category. It is also the most suitable firm to serve businesses in multiple disciplines including finance, management, hospitality, real estate, engineering, political science, law and security and all other categories. It is the best firm to bet on when it comes to global security that meets international standards.
8 – J.P. Morgan
The wealth management and brokerage service provider, J.P. Morgan is a global leader in providing different financial services to important corporations and institutions across the world. Investment banking, private banking, treasury services are some of the other services it provides.
9 – Morgan Stanley
Corporations and organizations across the globe bet big on Morgan Stanley for its reputation in investment banking. Its capital raising services and advisories are lauded by many business analysts and considered as one of the best in the industry.
If you are looking to sell your MNC or multiple businesses at one time, the three firms mentioned above are the ones to count on.
Many small-scale business owners looking to sell their companies are reluctant to use a broker’s service. They believe that a broker’s fee is equivalent to the difference between selling your business for a good price and a throwaway price.
But think again – your business is only worth the amount you sell. A dedicated brokerage firm can use its market experience to set an attractive price tag for your business and argue a strong case with prospective buyers.