Business Broker vs. Investment Banker vs. M&A Advisor
It helps to have the right advisor when selling your business. But that means choosing between a business broker, an investment banker, and an M&A advisor. What’s the difference between these three professionals, and which is right for you?
Business Broker
Many business brokers typically serve smaller companies but at Sunbelt, that isn’t the case. They’ve worked with businesses that range from small main street businesses to middle market Companies worth well over twenty million at closing.
Business brokers can be ideal when selling your business to a single individual, as is commonly the case with restaurants, hair salons and auto body shops.
Business brokers operate similarly to real estate agents, connecting business owners to potential buyers. Brokers often perform the valuation, marketing, and vetting of offers and help negotiate the deal to bring everyone to closing.
Brokers typically only get paid a success fee upon closing, and Brokers do not usually ask for a retainer or charge monthly fees Their experience with closing deals from different industries makes them ideal for getting the deal done.
Investment Banker
Investment bankers often deal with large public or private companies, though there’s no set limit to the size of the company these individuals work with. Investment bankers offer a range of professional services, including:
- Recapitalizations
- Raising equity investments
- Public offerings
- Regulatory compliance
Most investment bankers will have a “floor” at which they’re willing to operate, which is why they tend to work with large or high-value companies. But they have the professional licensing to handle complex transactions, which is why corporations will often pay additional retaining fees and other expenses.
M&A Advisor
Their services are quite similar to investment bankers. They can be a better option for larger companies whose needs are complex yet fail to meet the value floor for an investment banker.
Advisors are typically hired by companies that do not have in-house M&A expertise or resources. Advisors typically work on a retainer basis and are paid a percentage of the transaction value.
M&A advisors can be banks, law firms, accounting firms, or standalone companies.
Which Is Right for You When Selling Your Business?
How do you choose which advisor is right for your business?
Unless your business is large and complex, you won’t need the advanced services (or cost) of an investment banker. In fact, many small and medium business owners can have a great experience with a business broker at a fraction of the cost. With the personalized service Sunbelt offers, a seller will feel heard and clear about their goals.
Free Business Valuation Calculator
Selling your business is a big decision. The first step is determining its value.
Start by using our free valuation calculator. Sunbelt Business Brokers of Naples can help you determine the value of your business and, when you’re ready, guide you through every step of the process.
Using Sunbelt to Successfully Sell Your Business
Sunbelt markets over 200 business for sale portals, and we spend a lot of money marketing your business for sale, which is why we are so selective about the listings we present.
We offer custom deal structures, dedicated financial advisors, and compelling marketing assets that get our customers the best price for their business. Sunbelt takes the time required to pre-screen every buyer by establishing a profile and receiving a Personal Financial Statement (PFS). Because we do the original legwork, you get a head start on selling your business. Contact Sunbelt Business Brokers of Naples for a free valuation and consultation.