Unbiased advisor - A smarter choice than using a business broker

Only for businesses with revenue between $1 million and $100 million

Unbiased advisor - A smarter choice than using a business broker

Our process (summarized)

1, Everything starts with an unbiased business valuation. One should not under estimate the difference between an unbiased valuation, and biased sell side valuation.

2, Exit planning, if that fits into your time frame. Do you need to sell immediately? If not, there is a lot to gain by doing exit planning, primarily increasing the profits and reduce the dependence on the current owner. Even a small increase in the profits, gets leveraged when a multiple is applied, so it is typically very profitable to do exit planning.

3, Transaction advisory and help with vendor due diligence. Deferred payments, earn out and seller financing are oftentimes a necessary evil. Sometimes an added earn out can be beneficial, but oftentimes, sellers can lose it all when they agree to seller financing. The terms of it, is what matters. Also, time kills all deals, so we help you through the due diligence, by doing vendor due diligence, incl setting up a data room, where the buyer can find all the info that they are looking for.

Contact Us for a Quote

The process of commission based business brokers (summarized)

1, Initial contact or meeting, where you as the seller typically will get an indication of the business brokers valuation. (We don´t offer this).

2, The next step is for you to sign up with the business broker and pay the engagement fee. For micro businesses, it is usually anywhere between $2,500 and $5,000. For larger businesses, it is usually in the $10,000 to $40,000 range. Those who sell micro businesses and main street business usually call themselves business brokers. Those who sell larger businesses usually call themselves sell-side M&a advisors, but these terms are often used as synonyms. The engagement fee is usually somewhere in the 10% ish range of the final commission when the business gets sold. Several analyses have been done (incl of publicly traded business brokerages) and the conclusions are the majority of the revenue for business brokerages come from engagement fees, not the commission they earn when they sell the business. All business brokers and sell-side M&A adviors are not bad, but the majority of them live off of the engagement fee. The best ones are the ones who oftentimes say no when business owners are “willing to consider selling, but only for X amount of $”. Nielsen Valuation Group will never ask for commission or engagement fees, we only charge for unbiased advice.

3, According to the same analyses, in roughly 80% of the cases, there is no 3rd step. It all ends with the listing, meaning that roughly 20% of the publicly advertised businesses end up selling. The publicly traded business brokerage mentioned earlier had a success rate 4% (not 40%), meaning that 96% of the businesses that they listed for sale, did not end up selling. If one only look at the businesses in the $10 million to $50 million range, the numbers do look a lot better, and the sell-side M&A advisors are usually (but not always) a lot more professional and they don´t live off of engagement fees. Despite of that, there are still lots of reasons why you as the business owners, will benefit from unbiased advice, as opposed to commission based salesmen. Not having to pay the commission, is just one of many reasons.

Contact Us for a Quote

Business sales – Exit advisory. We are not business brokers

We work actively, with personal engagement and an exit plan that is unique for your busness, with a focus on making your business attractive to acquire. We also work with eliminating potential obstacles that a buyer could see.
Business brokers charge to list your business for sale, with the odds of selling it being against you.

– We are unbiased, and therefore also earn the trust of the counterpart.
Business brokers are known for being commission based salesmen. There are advantages and disadvantages with this.

Contact Us for a Quote

How much do business brokers charge?

Business brokers usually charge between 5% and 12% depending on the size of your business. Larger businesses usually come in on the lower end, and smaller businesses on the lower end.

There is also an engagement fee or marketing fee. For micro businesses, it is usually anywhere between $2,500 and $5,000. For larger businesses, it is usually in the $10,000 to $40,000 range

What kind of businesses do we work with?

Most of our clients are in the $2 million to $30 million range (revenue) but we occasionally work with both larger and smaller clients.

Contact Us for a Quote

Business valuation is the process of determining the most likely value of the business, in a transaction, where both parties are equally motivated to transact. A qualified valuation of a business should be according to the concept of intrinsic value and include an unbiased normalization of the financial statements. The final calculation of a business appraisal is fairly simple and quick, which is typically what you only get, when ordering an online valuation, without an on-site visit. The process of normalizing the financial statements along with weighing in the different valuation methods against each other, is what requires the most amount of time and competence, by the business valuator. The normalization of the financial statements is typically what affects the valuation the most. A company valuation should only be considered as reliable when it is properly independent and unbiased.

The most common methods for valuing a company are; the market approach, the income approach and the asset approach. They all have their strengths and weaknesses, and their own subcategories. No valuation method is complete enough, to solely be used to value a company.

The market approach doesn’t properly weigh in the profitability or assets of the company, which arguably are the most central aspects when valuing a business. Therefore, most valuations according to the market approach, are not of intrinsic value.

The income approach doesn’t take the assets that the company owns, into account. Therefore, companies with lots of assets get deceptive valuations.

The asset approach doesn’t take the profitability into account. Therefore, profitable businesses get deceptive valuations.

Want to go with a cheaper option or even do the valuation yourself?
Nothing is stopping you, but...

You may lose the lawsuit, due to the valuation failing to be waterproof.

You may never settle the conflict, hurting the relationship with your counterpart.

You may get deceived while entering or exiting your partnership.

The contact form does not work, please email christoffer@nielsenvaluationgroup.com

Christffer Nielsen, cell phone (737) 232-0838