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After years or decades of hard work invested in your business, you’re ready to move on. In theory at least, you don’t have to pay anything to sell your business. In practice, however, selling your business requires an investment of time and money. An M&A advisor can help you get the most value for your business, but you’ll have to pay them. Some advisors charge an upfront fee or retainer, while others charge a portion of the total sale price.

So what costs can you expect to incur as you sell your business? Here’s an overview:

Advisory Firms
Business brokers typically specialize in smaller business deals that are less than $1 million. They usually charge a portion of the sale, not an upfront fee. M&A companies work on higher value deals, and may charge both an upfront fee and a commission. This division according to value, however, is not absolute. You’ll find both M&A and business brokerage firms working across all sectors of the market.

So which is the right choice? It depends on what you need. It’s important to set clear expectations at the outset of the deal, and to sign a retainer agreement that makes all fees clear. The advisory firm you choose should also develop a comprehensive marketing plan, as well as agreements for buyers who have signed an NDA and want to move forward with the deal.

Marketing Your Company
The advisory firm you retain should cultivate a list of buyers in the same or similar industries, as well as potentially interested PE firms. They should then craft a brief teaser document that provides important details about the business without breaking confidentiality. In general, M&A firms do more direct and comprehensive marketing, while business brokers tend to limit themselves to marketing the business online. There are important exceptions to this rule, however, so it’s important to talk to your advisory firm so you know precisely what you are getting.

Screening Buyers
Not every buyer will be qualified to purchase the business. Your advisor must pre-screen buyers prior to releasing specific details about the company. This screening process should assess the buyer’s financial standing as well as their ability to run the business. Buyers with sufficient funds but the wrong background may not be qualified. Likewise, a buyer with the skill necessary but not the money or credit is someone you should not waste your time with. There may also be middling buyers who are partially qualified. They warrant a second look, but only if you can’t find highly qualified buyers.

Recruiting interested, qualified buyers is just the beginning. Next you must answer buyers’ questions and field offers. In the ideal scenario, you create a competitive bidding environment with multiple offers. This drives value, and can increase the odds of a more favorable sale. From there, you’ll complete the due diligence process, draft purchase and sale agreements, and then close the sale.