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How Brokers Work with Attorneys to Get Your Deal Closed

What The Experience Shows

In our combined twenty years of experience doing deals, we have worked with many attorneys.  They are all different, some really great,  and we have learned a few things along the way that are helpful for buyers and sellers to be aware of.  First and foremost, It is critical to buyer and seller when selecting an attorney, to work with those familiar with mergers and acquisitions.  Transaction attorneys have experience with buying and selling businesses and know what to look for to protect their client while keeping the deal moving forward.  We recommend that attorneys review offers to be sure that what buyer and seller think the offer stipulates is represented clearly.  Second, we recommend that you get your broker involved so they can develop a relationship with your attorney from the beginning to keep a continued open line of communication between them.  

Communication is key

Once the broker has both buyer and seller attorney information, the broker should be communicating with the attorneys to provide their contact info, explain their role as a facilitator to the transaction, and support the attorneys for a successful close.  Brokers will ask for regular communication from the attorneys, especially if issues start to arise.   

Something attorneys appreciate is a spreadsheet listing all parties to the transaction by name, company, phone and email.  This would include attorneys, brokers, accountants, lenders, landlords, etc.  Some brokers will send a deal summary and agreements such as NDAs and listing contracts, so the attorney is familiar with the entirety of the transaction.

Too often, a business broker will develop an adversarial position with their client's attorney, caused by the broker's unwillingness to stay involved with the transaction from contract to close.  Some brokers are not willing or able to work as a team.  Some attorneys will question the professionalism of brokers who come to close without the attorney having ever heard or seen from them through the entire process.  Attorneys need to be able to discuss issues with the broker and put their heads together to resolve any issues before they get out of hand.

Keep Attorneys In The Loop

As the deal progresses, a good broker will ensure the attorney is updated and copied on significant developments along the way, especially if the developments are deal contingencies.  This includes:

  1. Buyer "signing off" on due diligence
  2. Buyer receiving a lender commitment letter
  3. Approval by franchisor for a new/assignment of franchise agreement
  4. Landlord approval of requested lease assignment
Set Realistic Timeframe For Closing

The process should not be rushed.  According to some attorneys, a common mistake by intermediaries is setting unrealistic time frames for completion of activities or closing, given the work that needs to be performed and the number of parties to the transaction.  Brokers can help attorneys by resolving business issues between buyer and seller, and by facilitating communications and providing the broker's perspective based on their experience in transactions.

Nearing Close

Communication with the attorney may increase as the deal get closer to close.  The role of the broker as facilitator is to support the closing process and work on collecting documents needed.  Generally this includes:

  1. Prorations for the closing statement
  2. Updated list of furniture, fixtures, equipment
  3. Final lease agreement and amount of security deposit the Landlord is holding
  4. Final inventory adjustment if applicable
  5. Payoffs seller is obligated to make at time of closing including vehicle loans, equipment loans, etc.
  6. Calculation of payroll prorations and possible employee vacation/bonus credits

Brokers should always ask for a draft of the closing statement in advance of the closing and review it carefully.  We have seen it all, from incorrect sale price, misspelling of names, wrong dates and omission of the Seller's note on the closing statement.  Brokers are watching for these errors and advising the attorney if they find any.  

Work As A team

In summary, we see our role in working with your attorney as a true facilitator for getting the deal done.  We don't get in their way, rather make ourselves available as a member of your closing team to reduce the stress of selling your business and get to the closing table without hiccups.  

 

    

 

Lauren Altschuler
Lauren Altschuler
I assist buyers and sellers of privately held businesses in the buying and selling process. We help value your business for the best price, advertise it confidentially to qualified buyers, handle buyer interviews, discussions, negotiations and facilitate the due diligence investigation and the sale of the business.

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Ten Steps To Selling Your Busines

Our Sellers except us to achieve the highest and best offer for their business while taking the least amount of their time away from it as possible. That is because the absolute best use of their time is to continue to run and grow the company.  If revenue or profits begin to decline, buyers will walk away or decrease their offer. Transworld's philosophy can be summed up in a ten step, how-to strategy that culminates with the sale of a company. This proven method has been used to sell hundreds of businesses.  Here are the steps. Step1 Comprehensive Business Analysis and Feedback As your business broker, the first thing in our how-to strategy is to analyze your operation, finances, market potential and industry trends. We take that information and advise you on steps to prepare your business for sale, and  generate a business profile that represents your company in the most attractive way possible. Step2 Sale Structure We identify the best possible price range to sell your company. This is based on solid facts, the condition of the market, projected growth, sales potential and the sale of similar businesses within your industry. Transworld’s experts apply sophisticated, time-proven valuation techniques to ensure that your price is appropriate for the current market condition. The price must not be too high or too low. Yet, it must represent an attractive investment potential for the buyer. Step3 Confidentially Network The Business For Sale During the selling process, we utilize the latest technology to present your company to other business brokers and strategic buyers all over the world. This greatly multiplies the effort in your favor. With Transworld Business Advisors, you have literally thousands of industry professionals confidentially representing your company to buyers.   Step4 Confidentially Advertise To Buyers Our aggressive marketing program ensures your confidentiality and provides maximum exposure for your company. Your listing is placed in various industry databases, Internet sites, and publications which are constantly updated. We spend more money in advertising and marketing for buyers than anyone else in our industry. Step5 Control The Information Flow We organize all necessary documentation and release information only as needed. We use limited information when advertising to maintain confidentiality. Buyers are pre-qualified and required to execute a confidentiality agreement before receiving any sensitive business information. Step6 Create Competition For Your Company We attract thousands of buyers, creating competition for your business. Buyers are qualified for financial ability to meet the offer, and we engage you with only the most qualified buyers. Once you meet the best of the buyers, we urge them to prepare and present all offers. We can continue to engage potential buyers on your behalf as negotiation on an offer is in process and have another interested party ready to go should a buyer change their mind. Step7 We Negotiate For You To Achieve The Best Price Appropriate negotiation is crucial to achieving your best price and terms. We have the expertise to establish sound and resourceful negotiating techniques on your behalf. Transworld has trained all of its agents in the art of negotiating through curriculum that we have created specifically for our industry. Never negotiate without planning, expertise, or from a position of weakness. Step8 We Provide Exceptional Support To You Through The Due Diligence Process We take pride in our exceptional service. Only half of the job is finding the right buyer who will pay your price and meet your terms. The other half is getting that buyer to the closing table. We quarterback the deal, work with the accountants, lawyers, banks, landlords, and other third parties that could jeopardize the success of the transaction. We realize that you depend on us to guide you through the sale of your business. We make the transition simple and easy for you. We know when an opportunity for you may arise and are always there to take advantage of it. We also know when someone is trying to kill your deal or is being unreasonable and how to handle those situations. Step9 We Are There From Beginning To The Closing We help manage all administrative procedures, licenses, inventory counts and lease assignments that may be required. Transworld works closely with your advisors to ensure a smooth transition. Using the latest technology, we strive to be ready to work on your behalf to get the deal done! Step10 We Are There For The Transitional Phase And Beyond! Because we are in the business community, you may want to consult us from time to time after the sale. We will provide you with the assistance after closing. Transworld will always remain in your corner! Schedule Consultation Now

5 Tips For Keeping Your Business Sale Confidential

When selling your company, it is crucial for the health of the business and its future that the sale remain confidential. If your customers, vendors or employees learn it is for sale, it could have a negative impact on value.  Learning of a business sale may encourage customers to replace your product or service, employees to look for more secure employment, and vendors to demand payment of invoices.   If the value of your business is impacted, you will lose negotiating power with buyers and will not get the highest and best offer for it.  One way to protect the confidentiality during the sales process is to work with a business advisor, who will work on your behalf, use best practices, and allow you to continue to run your business.  Here are some tips we share with sellers on  keeping a sale confidential.

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