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Tips for Sellers

by Ken Berry, CBI

Once you decide you are going to sell and are ready to get that endeavor underway, put your thoughts about price and terms on hold and instead focus on:

    1. Be Honest with Yourself. This is hard for most of us to do, particularly in regard to something we have invested so much of ourselves into for such a long time.  Your practice has strengths and your practice has weaknesses. Identify each and be real about the potential value you are preparing to sell.
    2. If Selling on Your Own. Be aware that the best way to achieve fair market value is by courting a broad range of potential acquirers. So, successfully marketing your sale is important. Then you need a plan to field all inquiries and identify real interested buyers as opposed to looky lous. Hard to do while both maintaining your confidentiality and running your business. Finally, be prepared that negotiations can be challenging, particularly if you are trying to preserve a good relationship with the buyer.
    3. If Hiring a Broker. Focus on the depth of service the broker offers and find out specifically what they are going to do for you and how they are going to be involved in the sale. Any quality broker should: a) extensively market your sale; b) field all inquiries; c) identify the best potential buyers; d) negotiate on your behalf; e) be involved in all aspects of the sale and be available and responsive to you and to any potential acquirers; and, f) always work in your best interest. Ignore the platitudes about how great they are and false statements of “all cash” or other enticements used to get you to hire them… they are rarely accurate or achievable… and irrelevant if you are actually doing most of the work.
    4. Identify Your Priorities from Most Important to Least. Often our priorities are in conflict. For example, if you wish to sell to the buyer that is the best fit and you also want an all-cash sale, you have a conflict. Presenting your sale as all-cash is going to turn off many buyers, some of whom are likely a very good fit. The one undermines the other. So, identify your priorities and put them in order of importance.
    5. Fit.  We wrote an article on this topic in March (click here to read). Finding a buyer that is a good fit for you, your clients, your staff, and your business should be your top priority. This is by far the first and best step in minimizing your risk.
    6. Timing. It takes months to package a sale, promote it, develop buyers, negotiate terms, conduct due diligence, fund through bank financing, and close a sale.  And the September and October deadlines have become almost as significant as March and April. So, plan to get into the market earlier than you may think. We close sales that we put in the market by August with frequency, but each week thereafter diminishes the odds of selling.
    7. Transition. In our opinion, you owe it to your clients to not only find them a good, new "home", but to help acclimate them to the new owner and environment. This step, along with a good fit, is also going to diminish the potential impact of any risk you assume in the transaction structure. It is important to consider in advance how you would like to participate in the transition and be receptive to the buyer's needs as they may not align exactly with your thoughts.
    8. Put Yourself in the Other Party’s Shoes. Having the ability to see the transaction from the buyer’s perspective is crucial when trying to arrive at a deal that works for both parties.

      Price and terms are important, but by focusing on the above first and foremost you will have a much more successful sales experience and result.

      Comments (2) • Posted May 19th, 2017 at 12:35pm

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