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The 8 Functions of a Business Intermediary

Mike Kelner - Vending Business Sales, Merger & Valuation

1. Finding Buyers Business Brokers supplement the owners’ knowledge of their markets and potential partners by tapping into their professional contacts and networks, investor databases, and expertise to identify and connect with interested buyers.

2. Negotiating the deal Intermediaries typically take the lead in negotiating the terms — not just purchase price but also the terms and conditions, timing, process and other major considerations of the transaction.

3. Managing the sales process Capable intermediaries are the quarterbacks for the entire transaction process. They are the ones who are responsible for keeping the transaction process competitive, coordinating between all of the different aspects of the transaction, managing a broad team of other advisors, and keeping the transaction moving to a closing.

4. Adding credibility to the seller Engaging a recognized, reputable broker illustrates to all of the parties involved that there is a genuine commitment to explore the transaction and that there is professional representation, thus increasing the likelihood of a successful closing.

5. Preparing the company for sale Sellers are rarely prepared for the intense scrutiny they will be subject to by buyers of experienced buyers and their litany of professional transaction advisors. An experienced advisor can help business owners with this preparation which can involve everything from preparing detailed financial models and projections to in-depth customer analyses to working with management to prepare them for an intense transaction process.

6. Educating and coaching the owner The vast majority of business owners have never closed a transaction. Quality intermediaries have managed hundreds of transactions and can bring the benefits of that experience to the owner.

7. Structuring the transaction Transactions can involve various forms of consideration, such as cash, equity, seller notes, earnouts, and other forms of contingent consideration. Experienced brokers can structure each transaction specifically to address the needs and desires of both sellers and buyers, thus providing creative solutions for potentially conflicting transaction objectives.

8. Enabling owners to run the business The transaction process is an intensive process for sellers to endure, especially as they are trying to run the day- to-day operations of their company. By taking on most of the day-to-day work, intermediaries enable business owners to focus on growing their business rather than managing the transaction process.

#businesssales #vendingbusiness #buyervendingbusiness

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