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