As a Business Intermediary here in CT and NY that works with many Business Brokers and M&A (Merger & Acquisition) Advisors, I feel it necessary to disclose the fact that Princeton Capital is successful because business owners select Business Brokers and M&A Intermediaries to help them sell their businesses.  I am writing this objectively, which is how we operate, which can be seen by the multiple times we steer business owners from our firm toward other professionals, when we feel someone else can add more value.

To anwer the question...The fact is that most businesses are not sold by business brokers or M&A (Merger & Acquisition) intermediaries.  Most are sold by owners because a buyer happened to knock on their door at the right time.  When they seek help in selling their businesses, most small business owners turn to their trusted advisors.  For obvious reasons, small business owners rarely have a business broker or M&A intermediary as one of their advisors.  (A recent study showed that Accountants are the most trusted advisors of the Small to Medium sized, or Middle-Market, business owner.)  The decision to sell your business is a very important one, if not the most important professional decision a business owner will make.  Should you use someone to help you?  Which professional should the business owner use to sell their business?  Can they trust a complete outsider to do what is in their best interest?

In my experience I have found that in most situations, (certainly not every circumstance), the business owner's accountant or attorney will offer to be the lead, and basically orchestrate the transaction.  They obviously want to do what is in the best interest of their clients, and probably do not understand the value that an intermediary will provide.  They might not have relationships with a lot of intermediaries, and might not fully understand the process that led to the closing.  In addition, the fee looks extremely attractive.  Whereas they typically have more experience with their trade than the typical business broker or intermediary, most accountants and attorneys do not have the overall skill to get the most value for a business.

I feel the largest value we add to our clients comes from areas where a typical accountant or attorney does not have the experieince or expertise, and therefore "short changes" the business owners.  Those two areas are in the areas of marketing, and running a controlled auction.

There are so many potential buyers for any particular business.  The intermediary or Business Broker earns his fee by looking at buyers that are outside of the "usual suspects".  Strategic Buyers will certainly pay more for a business, but are their strategic buyers outside of your industry peers?  What is the true value of your business?  Is it in your customer base?  Distribution Channel?  Intellectual Property?  Employees?  In addition, Where are the best places to find those buyers?  The list is endless.  The intermediary can discover and articulate the true value of your business, and market that value to a broad audience to get the highest offers.

Running a controlled auction is extremely difficult, but arguably the most valuable service we provide our clients.  Creating a competitive environment for a company, whereas buyers understand that if they do not provide an offer with sufficieint value, the company will go to another buyer, is essential.  This is not easy to do, and contains many pitfalls that can be fatal to the deal.

Therefore you would like soemone to help you who is an expert at marketing, negotiating, and orchestrating the sale.  It costs money, but if that intermediary can get you 20-30% more for your company it is well worth it.  And the right intermediary will be able to do just that.

Princeton Capital Strategies, LLC
www.PrincetonCapitalllc.com
Providing Value Beyond a Business Broker