If you're thinking about selling your company, you are probably wondering where to start. Should you sell your company yourself or get help? After all, as a successful entrepreneur, you're used to figuring things out for yourself and making things happen. You've seen it all, and you've built your business through blood, sweat and tears. You might just be ready for the new challenge of selling your company on your own. 

While it may be tempting to manage the sale yourself, this work is better left to the professionals. OK, I say this as someone whose business it is to help people sell their businesses, but hear me out. For larger companies, those valued at more than $20 million, you'll want to hire an investment banker. But for smaller companies, you might look for a business broker.

Business brokers will be well-versed in selling companies. Just as you are great at running your business, they know the ins-and-outs of getting a company sold.

There are a number of reasons you should consider hiring an investment banker or business broker. Here are three that you should bear in mind.

  1. Most importantly, advisors have previously sold many companies and may have even sold ones exactly like yours. They know the sales process and how to negotiate the highest price from buyers. They also are aware of the tricks some buyers use to drive down the price. They will know how to avoid falling into these sorts of traps. A typical tactic is for a buyer to get toward the end of the sales process and then announce that your business is not worth what they originally offered. They might try to cut the purchase price substantially because they think you'll be eager to complete the deal.
  2. Advisors will know how to value your company and how to best position the opportunity to buyers. This kind of objectivity is hard for entrepreneurs to have. They can have trouble separating their personal identity with that of the business. This is necessary, though. A seller of a business needs an objective view of what they are selling and how much it might be worth.
  3. Just as in selling a house, you want an advisor between you and the buyer. They serve as a buffer. You are much better off not dealing directly with the buyer because your emotions need to be in check. If a buyer challenges you about something you might tell them to take their business elsewhere. A good advisor knows how to deflect these challenges to make them less contentious.

Most advisors are reasonably priced. Generally they will charge a modest retainer but the bulk of their fees are called a "success" fee. In other words, they don't make money unless there is a successful sale. Their fees can range from 2 percent to 5 percent of the total purchase price, but in many cases the higher price they negotiate more than makes up for the cost of the success fee. 

If you aren't careful, some buyers out there will waste your time. They may want to learn the secrets of your business while pretending to be an interested buyer, only to disengage before a sale can consummate. These same buyers may turn around and compete with you. Good advisors can sniff out buyers who are not serious.

What else can go wrong if your sell your business without an advisor? You might end up leaving money on the table. It can be millions of dollars. Too many sellers realize this only afterward and often have regrets they did not use an advisor.

Some advisors might just sign you up as a client but then don't spend enough time marketing your business. They may have more pressing assignments with larger clients. Their team may be stretched and spending time on more lucrative deals. To avoid this problem, be sure to ask who will work on your deal and what the timeline is. Once you hire an advisor, hold them to their timeline.

Other mistakes usually involve being out-negotiated, because you are unaware of the pitfalls to avoid. If you think selling your company is a great way to learn a new skill, be prepared to pay big for this lesson. If you're out-negotiated by the buyer in critical areas like working capital, it could easily cost you millions.

If you decide to hire an advisor, here are three tips to guide your search.

  1. Look for an advisor who has completed transactions for companies like yours and in your industry. Such an advisor will already be familiar with the quirks of your industry, as well as the universe of buyers.
  2. Hire an advisor you will be comfortable working with. You'll be with them for between six and nine months, which is how long a typical sale will take.
  3. Determine whether your company would be a good prospect for international buyers and if so, hire an advisor who has access to those buyers.

Selling a company is generally a complex undertaking. Buyers tend to be more experienced than sellers, particularly when entrepreneurs are selling their first company. When you're considering a sale, you'll want to get the best advice you can from experienced advisors and avoid the mistakes that inexperienced sellers make.