IT Business Broker

An IT business broker can help with valuing and selling an IT services business in California.

Here are five reasons you should hire an IT business broker If you are a retiring IT services business owner looking to sell your company for the highest price. 

What Is an IT Business Broker?

An IT business broker also called a business intermediary or a mergers and acquisitions broker is a professional who helps companies value and sell their business in the information and technology sector. These advisors typically have specialized knowledge in mergers and acquisitions in tech valuation to help with a smooth negotiation and sale process. 

If you are trying to buy or sell a company with annual revenues between $5 million and $50 million, this business classifies as a lower middle market deal. Depending on this size, your deal may require a deal team of advisors, while a large deal could require dozens of experts. 

Below are the most common roles of an IT lower middle market business broker.

Top 5 Roles

These are the five roles that an IT lower middle market business broker or sell-side advisors should embody. 

Value the Business

Are you asking yourself "what is my business worth?" or “how can I value my business quickly?“ You will benefit from using a middle market business broker to value your MSP IT company. An IT sell-side advisor has extensive experience negotiating deals with knowledge in technology company valuations. They will study your business and assess your quality of earning report before offering the best possible price for your IT business.

Represent the Seller

Selling a business is an overwhelming and time-consuming process. Brokers that are sell-side advisors can help sellers by preparing to locate and vet potential buyers during the preparation period while organizing the specifics (like a sell-side due diligence checklist) and adhering to goals and timelines. 

Reach or Represent a Potential Buyer

Business brokers have the best resources and networks to reach a large database of M&A buyers best suited for buying an IT business. If you are looking to acquire or buy a lower middle market business of more than $4 million in annual revenue, you may benefit more from putting a broker on your team rather than relying on the seller’s broker.

From the buyer’s perspective, brokers can help narrow down business listings that best fit their goals and budget. And from the seller's perspective, brokers can help properly position your IT business confidentially in front of serious and qualified buyers.

Marketing and Exposure

It is key to advertising a business to the largest possible audience while keeping it confidential. Reputable licensed and certified brokers in California have access to a wide database of prospective buyers to reach a large pool of qualified prospects.

Unlike real estate agents that put a sign on a property location to advertise a sale, reputable business brokers maintain strict confidentiality. 

Do you want to know how Rogerson Business Services find and qualify high bidding buyers? I want to discover how

Organize the Sale

The moment the seller decides to put their business up for sale, it is time to organize the deal (up to a year in advance if possible). Some of the broker’s duties include but are not limited to facilitating meetings between the seller and potential buyers, handling negotiations, due diligence investigations, writing offers, and more to close the deal.

See - Walk ME Through A Sell-Side M&A Deal

Lower Middle-Market Business Brokers

If you are an IT MSP business owner and saying: 'Sell My IT Services Business' in the lower middle-market segment, this can be overwhelming in the state of California.

Lower middle market companies have a revenue bracket ranging from $5 million and $50 million. From IT and manufacturing to consumer products and medical practices, there are many types of middle market companies in California. You will need the right exit strategy to help guide you through the process.

let’s review some questions and steps to consider:

1. Do they provide the best value?

Pay close attention to quality vs. cost when evaluating your broker's valuing and selling a business process.

Review all the services each IT M&A brokerage is delivering in the representation agreement. One firm may offer a lower price but charge for overages and additional services, making it less cost-effective than a competitor.

Mainly, look for a sell-side M& broker in the lower middle market that charge a succession fee or percentage if the business get sold.

Would you like to know what is the difference between hiring a business broker vs. an M&A Advisor?

See what do they charge for their service.

2. Are they client-service-oriented?

An established M&A advisory firm should be able to respond quickly to your questions and resolve issues efficiently. Check to see if they offer a representation agreement that covers both initial onboarding and sell side due diligence process.

3. Do they take preventative measures?

A quality IT business broker ensures preventative measures are in place to resolve negotiation issues proactively.

4. Are they delivering truly specialized expertise?

Many IT business brokers are in direct competition and often try to win you over with similar sales pitch strategies. So how do they stand out? The key is to evaluate whether you have access their social proof work like case studies, reviews, ask for previous similar clients' list of phone numbers to call and do your due diligence, look at the deal success rate by evaluating the total number of won deals versus those that were not that successful.

5. Do they provide a sophisticated documentation process?

An efficient document management system is a critical component when managing a successful client relationship, so you can close your deal with ease.

How Can I Value My Business Quickly?

So you’re ready to sell your Information technology services business in California and retire or possibly invest in your next venture.

First, you’ll need to value your IT service business before listing it for sale. You can quickly determine your business worth with this calculation: business value = assets – liabilities.

However, there are benefits to valuing your business with a certified business broker. An expert can also help with the following:

• Organize all the required documents and legal papers.
• Serve as the liaison between you and the potential qualified M&A buyers.
• Handle the closing process, the sale, and due diligence.

Selling a Business to a Private Equity Firm

If you’re looking to sell your IT managed services provider (MSP) business to a private equity firm, it will be crucial to bringing a lower middle market business broker on board. Selling to a private equity firm can have major advantages, particularly where finances are concerned. 

An M&A advisor can assist with this process. Not only can they help position your business in a place to sell, but they can build hype around the sale as well. With the aid of a middle market business broker, they can coach you through the process of acquisition, market your business, and negotiate on your behalf.

Sell-side Advisors

California is home to a variety of M&A advisory firms specializing in IT business sales. As a result, there is a high demand for these types of sell-side advisors in the state.

Sell-side advisors help you sell your business to other companies and are often hired by shareholders or management teams. With experience in the mergers and acquisitions (M&A) industry, sell-side advisors help their clients negotiate the best sale price and deal terms. 

The best way to find an IT business broker or a sell-side advisor is to search by experience and accreditation. 

Ready to Hire a Lower Middle Market Business Broker?

To ensure your business sale runs smoothly, you may want to hire a merger and acquisition broker to verify that you're doing everything correctly and not neglecting steps. An M&A broker, IT business broker, or a sell-side advisor will save you time and money and give you peace of mind that you're putting your California business in good hands.

Final Take

Selling your IT services business in the lower middle market in California is a life changing event that requires forethought and careful planning.

Before selling your business, know its worth in both tangible and intangible assets. Find a reliable professional representative like a certified business intermediary specialized in M&A deals to manage the process while you continue to maintain your business.

The IT business broker will do the heavy lifting by marketing to and negotiate with vetted buyers and close for a reasonable price. 

See how Rogerson Business Services sold businesses in California by Visiting These Case Studies.

If you have decided to value and then sell your information technology services company now or within the next six months, click here to get started with this quick and simple form, so we can understand your pain points better and prioritize your inquiry with RBS Advisors.

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