Unknown to many buyers and sellers—especially first-timers—is 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 deal—so we’ve started by outlining roles involved in “traditional” 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 others’ 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).
Accountant
Accountants play a critical role in helping sellers’ 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 business’ value (or lack thereof).
Bank
Should a buyer decide to purchase a business with a loan, buyers will select a bank to partner with—whether conventional, SBA or another loan option. The loan process should become part of the transaction timeline as there’s oftentimes several steps required in getting approved, which impacts the overall deal.
Attorney
Buyers and sellers obtain their own, personal attorneys for protection—to ensure both parties understand all of the ins and outs of the agreement.
Life Insurance Broker
When there’s 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.
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 there’s no faulty issues or concerns that might impact the price of the business (and therefore, loan approval). Gas stations are often subject to environmental groups’ 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 we’ll connect you with an experienced broker.
