The investment management business-for-sale marketplace is a nuanced environment, full of pitfalls for sellers who aren't prepared for its demands.
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If your exit strategy involves selling an investment management business now, business sellers may need to apply a combination of incentives and techniques.
Signs You're in Over Your Head
Many investment management business are tempted to save brokerage fees by selling their businesses on their own. But for every successful unassisted sale, several other investment management businesses sell below market value or languish on the market for years without attracting the interest of qualified buyers. Generally, listed businesses should generate interest within a few months. Lack of buyer enthusiasm or persistence indicates that something is wrong. The remedy is professional brokerage or a consultation with more experienced sellers.
Selling an Investment Management Business to an Employee
Employee sales have pros and cons. There are some perks to selling the business in-house. Since the worker already knows the ins and outs of the business, due diligence should be a breeze, not to mention the fact that you won't have to wait months or years for the right buyer to emerge on the open marketplace. Yet most employees lack the means to buy their employer's business at or near the asking price. A seller-financed deal may be necessary unless the employee has significant assets or investor backing.
Objectivity is a rare commodity in a business sale. Your estimate of your company's worth is probably skewed by your emotions and your close, personal connection to the business. It is difficult for many owners to accept the cold, hard facts about their company's worth, but objectivity is the name of the game in a successful investment management business sale. Consider recruiting a team of objective professionals to help manage your expectations as you prepare and negotiate the sale of your business.
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