Why Hire an M&A Broker

If you are a California wholesale distribution business owner in the lower middle market and looking to sell your business for the best price, continue reading to discover five reasons why you should hire a merger and acquisition broker.

What Is a Merger and Acquisition Broker?

Merger and acquisition brokers are dealmakers who will advise on and facilitate transactions involving the sale or acquisition of a wholesale distribution business. They play a significant role before and during the sale process.

What Is the Role of a Merger and Acquisition Broker?

As a wholesale distribution business owner, you may not be familiar with what it takes to sell a business. This is where a wholesale distribution business broker comes in. Brokers can help you put together the sale’s deal and market it to find the best buyer.

During the selling process of the distribution business, a business broker will find, and screen qualified buyers. They will also get you the best offers so that you do not leave any money on the table.

A broker understands the wholesale distribution industry trends and has the right strategies to get you the type of deal you are looking for. In addition, they will walk with you until the sale is closed. Some of the other roles they play include the following:

1. One: Preparing the Wholesale Distribution Business for Sale

Selling a wholesale distribution company involves a lot of paperwork, such as agreement drafts and buyer review reports. An M&A consultant has many years of experience under their sleeves and will guide you on how to sell the business and take up the paperwork entirely.

2. Two: Conduct a Full Valuation of the Business

Your perceived value of the wholesale distribution business may not be what a buyer will pay for it. A merger and acquisition broker can help you get accurate data regarding your business’s earnings and overall financial health. Buyers appreciate it when you table a verifiable valuation of the wholesale distribution business. 

3. Three: Connecting the Business Owner to Qualified Buyers

You can only do so much on your own. Hiring a business broker who has previously dealt with California wholesale distribution companies will quickly help you land qualified buyers.

4. Process Monitoring

Selling a wholesale distribution company involves many steps that must be followed before closing the sale. A broker with experience in mid-market mergers and acquisitions monitors the transaction process adhering to the set schedule.

5. Five: Ensuring Compliance With All the Regulations

When you want to sell a wholesale distribution company, you must adhere to all the regulations set by law in California. A business broker will help you get it right from the beginning by ensuring the sale process stays within the laws that govern distribution mergers and acquisitions.

How Does the M&A Broker Add Value?

Selling a business is a strenuous process that will rob you of the much-needed time you would have spent managing the business you want to sell. Hiring an experienced business broker pays dividends big time. Some of the areas M&A brokers add value include:

1. One: Preparation

Business brokers help you adequately prepare for the sale process. This preparation involves developing marketing plan with materials that will help push the brand. The brokers also help address any risks that can affect the sale’s deal momentum. 

Sometimes the deal negotiations can get quite heated. M&A advisors act as buffers, eliminating all emotions so the buyer and seller can maintain good working terms.

2. Two: Business Continuity

A selling process can take up to ten months before completion. As a business owner, staying away from the business for that long sourcing for buyers can be detrimental to the bottom line. By working with a broker, the business owner can concentrate on essential business functions.

In other words, the owner can prioritize the business while the merger and acquisition brokers do the heavy lifting during the sales process. 

3. Three: Business Valuation

An M&A broker considers numerous variables when determining what the distribution company is worth. They examine all the cash flow and look at revenue, among other things, to establish the value of the business. One way to secure the best deal is by welcoming several qualified bidders. Professional M&A brokers understand that and will not disappoint.

4. Four: Sourcing Buyers

The business broker can help you identify the right buyer for your distribution business. Given their experience, a merger and acquisition broker knows just the right places to find potential buyers. They can bring to the table serious prospects with the financial muscle to make a profitable deal.

5. Five: Closing the Deal

The M&A brokers significantly shorten the curve between the offer and the closing. When they find a suitable buyer, the business broker summons all the relevant parties, including the legal experts. The deal is closed after putting all the paperwork in order. A fast sale means fewer employee issues and meddling by the competition.

How Can I Sell My Distribution Business Quickly?

For some owners of distribution companies in California, the selling process can take a long time, causing anxiety. If you want to sell your business fast, consider hiring a business broker. A professional business broker understands wholesale distribution industry trends and will guide you through the entire process, speeding up the sale.

Positive market trends can also help sell your company quickly. Most distribution companies did well during the pandemic and are now on a hunt for strategic additions. More than ever, this would be an excellent time to sell your distribution business. With an M&A advisor by your side, you are guaranteed to clinch a good deal for your wholesale distribution business.

How Can An M&A Broker Help You Get Acquired by a Bigger Company?

Of course, when you are selling your distribution business, you want a buyer who will pay top dollar for your business. But you must play your part to ensure you are properly positioned to be acquired. One way to do this is by updating all your accounting records and documenting all the operations records.

Bringing an experienced business broker on board also helps you understand how to get acquired by a bigger company. For example, they can develop a marketing plan that will create a big buzz around your brand. The M&A broker can also guide you in finding the right board members who will invest in the business and provide proper connections when selling the business.

With that in place, big companies are likely to be interested in your business. If a good number expresses interest, you can count on the business broker to get you the best deal.

Why Work With M&A Advisors

When selling your wholesale distribution business, you want the sale process to proceed smoothly without a hitch, which is why you must leave it to the pros. A merger and acquisition broker will ensure that you play by the book without overlooking any crucial step.

An experienced M&A broker will shoulder the sale process, allowing you to do what you do best; run the business without interruptions. You also get the peace of mind that comes with knowing that you are placing your business in safe hands.

If you are a retiring business owner looking to exit your lower middle market distribution company in California, here are six tips to get you started:

1. Don't wait until the last minute to start planning your exit. The process of selling a lower middle market wholesale distribution business can take a long time, so it's important to start early.

2. Have a clear idea of what you want to get out of the sale. Know your goals and what you're willing to negotiate.

3.  Know what's your company's worth. This is an essential step to take when planning to sell your distribution business in California.

4. Choose the right type of buyer. Not all buyers are created equal, so do your research and find the right one for your business.

5. Be prepared for a lot of due diligence. M&A buy-side due diligence is when buyers will want to know everything about your business, so be ready to provide documentation and answer questions.

6. Be flexible with the terms and conditions of the deal. It's important to be open to   negotiation  to get the best possible deal for your business.

Rogerson Business Services, also known as, California's lower middle market business broker is a sell-side M&A advisory firm that has closed hundreds of lower middle-market deals in California. We are dedicated to helping our clients maximize value and achieve their desired outcomes. 

We have a deep understanding of the Californian market and an extensive network of buyers, which allows us to get the best possible price for our clients. We also provide comprehensive support throughout the entire process, from initial valuation to post-closing integration. 

Our hands-on approach and commitment to our client's success set us apart from other firms in the industry. If you consider selling your lower middle market distribution business, we would be honored to help you navigate the process and realize your goals.

If you have decided to value and then sell your lower middle market wholesale distribution company or still not ready, get started here, or call toll-free 1-844-414-9600 and leave a voice message with your question and get it answered within 24 hours. The deal team is spearheaded by Andrew Rogerson, Certified M&A Advisor, he will personally review and understand your pain point/s and prioritize your inquiry with Rogerson Business Services, RBS Advisor

Go to the next article: Part of tips to selling wholesale distribution business in California series ->

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