Sales Advice from a Specialist

You may be a business owner, but there is a scope of knowledge you must have to successfully sell your enterprise. Dana Robinson has an armory of advice. He is an experienced seller, business transactions expert, advisor and legal counselor for his firm called TechLaw. His investment banker and lawyer wisdom can guide any type of venture. Robinson is an ideal mentor for those using Plan for the Sale, a multimedia educational tool for learning what a business sale entails.

As with every big decision, you must look at the pros and cons. Deciding to work with an investment banker is one of those major choices. One of their important assets is that they add value to a business. Their abilities go beyond what a buyer usually realizes and they don’t leave potential buyers questioning your moves.

“A couple of things that investment banks should do that brings value, is that they should be really good at recasting your financials and working with your accountants to come up with a plausible and believable recast,” says Robinson.

Any business can recast their finances. Robinson says an investment banker is  skilled in showing where your money comes and goes. You won’t be hiding a thing and will have a credible banker to back that up. An investment banker has a network of buyers and investors who recognize their honest, reliable services. Recasts are a service they can provide, but they also have the ability to be detailed oriented.

“You want to be able to say, ‘We’ve executed well on all these things. These are our core competencies, but we’re not so good over here and that’s why there’s a strategic opportunity for you, if you buy us, to make more money there,’” says Robinson.

That honesty is respected, which makes investment bankers professional marketers. They can draft marketing materials and spend a lot of their time connecting with potential buyers and stirring up a market for your business. All of that work to get a letter of intent takes some time. Robinson says this is an area where most of their retainer fee is earned.

If a business is selling for less than about two million dollars, Robinson recommends not working with an investment bank. A banker is looking to make money off of a sales process. Smaller sales may not be worth their time. If that is your situation, Robinson says small business brokers or small investment bankers not tied to a bank are alternative services. Some investment banks may just charge an hourly rate like a lawyer, which provides smaller sales the positive experience of working with a professional banker.

“So, you can definitely avoid hiring an investment bank, or use them on a limited basis, or find a lawyer that’s really good with transactions and let them help you through the process,” says Robinson. “You’re only paying legal fees. You’re not paying a success fee.”

Once a seller receives a letter of intent, they should seek some counsel, whether from a banker, accountant or lawyer. This letter will initiate an agreement that a seller will not have contact with other potential buyers during an agreed upon time period for due diligence. More than one letter may be served at once, so choosing a single buyer for due diligence may require some assistance, like help from an outside perspective. The right investment banker may be a guide. Robinson has his idea of making sure the right banker is chosen.

“Finding an investment banker is a little like finding a lawyer. You can’t say, ‘Oh, this law firm is great,’ because law firms aren’t great. Law firms are profiteering businesses. What makes law firms great are finding within them a great lawyer that knows your business, your industry, your language, has symbiotic relationships, so that you get introductions and things that help your business,” says Robinson.

Due diligence isn’t the finish line. A sales agreement will have it’s own obstacles and needs for further help. A buyer should be attentive to knowing when they need services, like those provided by an investment banker. Robinson shared his ideas on if and when a banker is needed with Plan for the Sale. His skills and sales make him an expert in managing a winning deal.

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