The BAE “Competitive Advantage”
“Success is our duty, obligation and responsibility”-Business Acquisition Experts
When the time is right to sell your company and monetize your life’s hard work, it is critical to hire a business broker or investment banker that has more than one method to getting a deal done. As a business owner you typically only have one shot at selling and time is absolutely of the essence. Make sure it is done right without any wasted time or failed attempts.
There are essentially two types of brokers for lower middle market companies. The way that they go about marketing and selling a company is very consistent to each firms’ niche.
- The first are “main street” brokers who most likely are a franchise office owner for one of the big franchisors like Transworld, Murphy Business Brokers and VR Brokers. These firms and their small satellite offices specialize in selling gas stations, hair salons, laundromats, etc. Their average sale price is $300,000. Main Street brokers rely totally on marketing platforms like com and bizquest.com. 99% of the time this is their only method for sourcing buyers. While these platforms are certainly effective, this single approach can be fatal if your company listing fails to draw attention on these websites. It simply will not be sold. Not to mention, this specific subset of brokers just doesn’t have the skills and vision to sell a larger company. Especially to a strategic buyer.
- On the opposite side of the spectrum there are Investment Bankers AKA M&A Advisers. Unlike main street brokers IB’s rely solely on running a competitive auction for their clients. They do not market on the online business for sale platforms.
An auction is executed by initially generating a list of strategic buyers whom would possibly be interested in an acquisition for a host of reasons and synergistic purposes. Once the list has been created and approved by the bankers’ client, the IB’s then pro-actively reach out to the possible suitors with phone calls and marketing materials in an effort to garner interest. The auction process can be very successful and in many cases can produce above average sale price premiums when numerous buyers end up in a “bidding war”. However, if the auction process goes awry and fails to gain interest from the buyers on the list then guess what? The bankers are out of options and you the seller are out of $50k in upfront retainer fees while still being stuck with a business that you were hoping to exit. It should be noted that Investment Banks usually only sell businesses ranging from $25,000,000 to 100’s of millions. Their smallest are usually companies with minimum enterprise values of $10,000,000.
As you can see there is a large disparity in the sale prices of the two different broker types and a vastly different strategy to marketing and selling their listings. This is where the Business Acquisition Experts “competitive advantage” is found. BAE takes a two-pronged sale approach to our lower middle market companies. We not only confidentially market our listings on 35+ different M&A affiliate websites but we also proactively research strategic buyers and run a competitive auction process as well. This has proven to give us much higher closing ratios then our counterparts. Both the auction and online marketing strategies work well, but when they are executed simultaneously the business sale results are unparalleled. At BAE we are situated between Main Street and Wall Street. We sell companies too large and too complex for the main street brokers but yet too small for the boutique investment banks. Our niche is from $1,000,000 to $15,000,000 and we excel at it! We are the EXPERTS!
Don’t make the fatal mistake of putting all of your eggs in one basket. Choose a professional brokerage with more than one trick up their sleeve and you will be blown away with the results.