Selling your manufacturing business is a big decision involving a multitude of components. The most important choice you have to make after deciding you want to sell the company is whether you will sell it yourself or use the services of a business broker. Evaluating the pros and cons of each can help you make a decision that is beneficial for you and your manufacturing business.
Costs
There are a variety of fees and costs associated with using a business broker. For instance, you should expect to pay a broker’s commission. It can be tempting to sell your manufacturing business yourself to save money, but it could end up costing you in the end.
Business brokers are experts in the industry for a reason. They are knowledgeable about the selling process and how to get the most money for the deal. Manufacturing business owners may be able to make the sale on their own but will likely not get as much for it compared to if they used a business broker. Do not put yourself in a position to wonder how much money you could have made.
Buyers
One of the biggest hassles when you want to sell your manufacturing business is not necessarily finding buyers. It is vetting them. Business brokers typically have a database of prospective buyers interested in specific types of companies. If the buyers are not already vetted, they will be without you having to do anything. Do the sale on your own, and you are responsible for finding the prospective buyers and ensuring you properly vet them, which could be a long and tedious process.
Questions And Assistance
No one goes into a new situation in which they have no experience, such as selling a manufacturing business, without having any questions and confusion along the way. Including a business broker on your team means having an expert source to contact when you need answers. When you try selling your manufacturing business yourself, it could be easy to make mistakes when you do not have anyone to turn to for professional advice.
Time
When you hire a business broker, one potential issue is that you have to work on their schedule. For example, they may only be able to schedule you for appointments at certain times or need paperwork signed immediately. If you sell your manufacturing business yourself, you are operating primarily on your own schedule.
Another matter to consider is the length of the selling process. Having a lack of knowledge in doing a particular task, such as selling a manufacturing business, means it will take you much longer than someone with extensive experience. Expect to devote a significant amount of your time to the task.
Business brokers know how to help prevent delays and keep the process moving smoothly, whereas a self-seller may make mistakes and take longer to figure things out. If you want the selling process to get done efficiently, opting to work with a business broker is usually the best option.
Experience
In addition to the previously mentioned ways a lack of experience may prove detrimental while selling your manufacturing business, it is vital to note that someone may try to take advantage of your lack of business selling skills. For instance, they may attempt to negotiate the price to a much lower amount than the company is worth. A business broker has the experience necessary to handle every step of the selling process and prevent potential problems before they arise, all while looking out for your best interests.
Stress
There is a significant amount of stress involved with selling any type of company, including a manufacturing business. The bigger the company, the more complex (and stressful) the process.
Selling your manufacturing business will likely already come with some pressure as you transition into a new chapter of your life without it. Paying a business broker to effectively and efficiently handle all the stressful situations that arise so you can focus on what you need to do for yourself and your business could take a huge weight off your shoulders.
Legalities
Everything involved with selling your manufacturing business has to be done legally, especially if it concerns chemicals and/or other highly regulated materials. There is no room for error. Unfortunately, self-sellers often do not have the know-how to guarantee that everything will be done in accordance with every law and regulation there is with selling a manufacturing business.
This does not mean that, as a self-seller, you did anything intentionally, but mistakes happen. Each document needs to be filled out properly, and all phrasing, punctuation, and wording must be perfect and specific to your situation and manufacturing business. Any slight error could mean anything from a delay in the final sale to legal loopholes the new buyer(s) could use against you in the future.
A business broker ensures that all tasks, including the paperwork, get done correctly to prevent any legal issues in one of the many possible areas where there could be a potential problem.
The Bottom Line On Business Brokers
There is so much more a business broker does beyond simply selling your manufacturing business. We highly recommend weighing the pros and cons of self-selling your company vs. opting to work with a business broker to determine which option makes you most comfortable and which is the best move for your company. Using the services of a reputable business broker, such as IBEX Middle Market Business Brokers, could make a significant difference in a smoother, more profitable selling transaction.
