Best broker for a manufacturer
Which business broker should we reach out to for valuation and sale of a specialty manufacturer/brand with $2M annual sales, 2 patents, and unique market position?
Thank you for your question!
It is difficult to recommend a specific business broker, as business brokers are generally restricted to their local market. There are several national business broker firms, two of the largest being Sunbelt Business Brokers, and Murphy Business Brokers. Either firm can direct you to a local business broker in their organization who can help you out. Make sure you mention your industry to be directed to a broker with experience, if one is available in your market.
It’s important to note, however, that the valuation you receive from a business broker may not rise to the level of a professional appraisal. Instead, a broker may be able to provide a broker price opinion (BPO). Many businesses are sold based on a BPO, however you’ll want to ensure you’re working with a reputable and experienced broker or risk a poor assessment of the value of your business.
The advantage of a BPO is that it will likely come at a lower cost (in some states, brokers may not charge for a BPO), and is generally a simpler, shorter process; however, a BPO may not adequately take extenuating factors into account in assessing the value of your business.
If you expect that valuing your business will be complex, and it sounds like it may be, consider consulting with someone with the ABV credential (Accreditation in Business Valuation) or similar. This is usually a CPA with an understanding of the complexities of valuing a business. Alternatively, consider working with a professional business valuation or mergers & acquisitions firm. which can further take your industry and market position into account.
Remember, the more complex the valuation the more it is likely to cost, but getting this right is critical. If you value your business too low, you’re leaving money on the table. If you value it too high, you may not find any serious buyers, and lowering the price on your business after it has been listed may weaken your bargaining position when you do finally find a buyer.
If you’re not sure who to choose, you may wish to contact some providers and ask some questions. As a general rule, you should compare at least three providers. Make sure to include the following questions in the list you ask each provider:
I hope this has helped to answer your question!