MYTH #1: You Save Money Selling Without a Broker
IN THIS FEATURED SERIES, WE DISPEL MYTHS ABOUT SELLING AN AGENCY
The decision to sell your agency can be driven by a number of motivations: retirement, health, market conditions, or a desire for a change. While there’s no one-size-fits-all reason to sell, there is a right way to pursue a sale that ensures the highest level of success.
Allow me to share the story of our client, John, from 2020, to illustrate “the right way” to sell your agency.
Having spent many years in the industry, John felt it would be easy to find a buyer and negotiate a good deal on his own. To his credit, he secured two offers from larger firms, one of which seemed fair enough to him and he was willing to consider it. He wanted a second opinion before signing on the dotted line, for which he turned to our firm, Agency Brokerage.
Our market value assessment was materially higher than the offers that John had already received and our team proposed suggestions on resolving a few deal issues. Happy with the quality of our work and professional advice, John moved forward with hiring us and conceding the idea of selling on his own.
Not only did John end up at a considerably higher sale price, but the terms were better, and the process moved faster. In the end, his ROI on hiring us was over 900%*! Plus, Agency Brokerage got one of the initial buyers that John was working with to increase their offer by 15%.
Why Should I Work with an M&A Advisor to Sell My Business?
John’s success offers evidence as to why it is better for an owner to seek the assistance of an M&A expert. His story highlights three key elements to the value of using an advisor like Agency Brokerage:
1) Achieve the FULL Market Value
Going direct to a buyer never yields market value. Direct buyers often seek exclusivity to buy your agency for a lower price than it is worth or on terms that are favorable to them. By involving professional advisors, you open the door to a wider array of offers, ensuring a competitive assessment of your agency’s value.
2) See More Options
Taking your business to market broadens the number of interested buyers, as well as the type of buyers and type of deal structures, thus giving you options that may not have been known to you. Moreover, by delegating negotiations to M&A experts, you’ll have the time and space to make an informed decision.
3) Gain Peace of Mind
When John received offers “direct” from two buyers, he had a multitude of questions: Were the offers in-market? Were the buyers presenting their highest and best? Were either of these buyers the best successor for his agency? Were those buyers going to string him along and renegotiate later? He did not know, because selling agencies wasn’t something that he did … but it is what we do every day.
Overall, John’s experience highlights the invaluable role experienced M&A advisors play in helping owners achieve the best outcome when selling their business. By trusting experts in the field, you can increase your offers, be discerning in your choices, and ultimately secure a more lucrative deal.
So, why settle for less?
*[Net increase in sale proceeds vs. advisory fee]