4 questions to ask a business transition service provider 

Let’s say I want to go out and buy a business, but I don’t know anyone whose book I can buy. Rather than cold-calling other advisors to see if they are interested in selling their practice, several companies can provide a database of potential sellers both near and far to your own business. Once you do due diligence, they can also help with valuation and negotiating a price.

Here are a few questions worth asking when choosing a provider:

  1. What services do they provide? Beyond matching buyers and sellers, can they help with legal aspects of acquisition and sale?
  2. What is the practice value for the transactions they have helped people with?
  3. What’s in their database in terms of buyers and sellers?
  4. What is their expected time of turnaround?

There are so many people involved in doing a buyout. Even using an additional service provider for both of my deals, I still had to get my own outside accountant involved. I’d suggest using your own accountant plus the seller’s accountant just to make sure you’re coming to a happy agreement and a fair deal in terms of tax benefits.

Michelle L. Bender, CFP, is a nine-year MDRT member from Germantown, Maryland. Find more tips in the MDRT Business Continuity Decision Tree.

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