Unknown to many buyers and sellersโespecially first-timersโis the number of parties involved in the overall buy / sell transaction. The key partners involved in a business transaction certainly differ depending on how complex or easy the dealโso weโve started by outlining roles involved in โtraditionalโ deals.
Buyer
A typical buyer profile might include individuals like first-time buyers, companies interested in merging, and / or private equity groups actively seeking acquisition opportunities.
Seller
Retirement, boredom, new opportunities or relocation are just a few of the reasons former business owners decide to list their businesses for sale. Some sellers might be focused on urgency and selling quickly while othersโ interests lie in finding the right ownership style or cultural fit.
Business Broker
A business broker acts as the liaison between the buyer and seller, as well as the other partners part of the overall business transaction. He or she facilitates and coordinates deliverables across the partners in order to reach the finish line (a sale).
ย Accountant
Accountants play a critical role in helping sellersโ produce accurate and up-to-date financials as part of the due diligence process. Buyers also might rely on his or her accountant to cross-check profitability and other key data and numbers that might indicate a businessโ value (or lack thereof).
Bank
Should a buyer decide to purchase a business with a loan, buyers will select a bank to partner withโwhether conventional, SBA or another loan option. ย The loan process should become part of the transaction timeline as thereโs oftentimes several steps required in getting approved, which impacts the overall deal.
ย Attorney
Buyers and sellers obtain their own, personal attorneys for protectionโto ensure both parties understand all of the ins and outs of the agreement.
ย Life Insurance Broker
When thereโs high financial stakes, buyers will be required to ensure life insurance will cover the cost of the business in the event of unfortunate circumstances such as illness or death.
ย ย Appraisers & Environmental Groups
When real estate is involved, especially in the instance a bank supports the loan, appraisers and environmental groups likely get involved to appraise (and therefore, approve) the value of a property, while also making sure thereโs no faulty issues or concerns that might impact the price of the business (and therefore, loan approval). Gas stations are often subject to environmental groupsโ arduous checklist, as one example.
Curious as to how the transaction process typically works? Our broker team is always available to answer your questions. Reach out to Tim Bullard and weโll connect you with an experienced broker.