Questions
What owners ask before they engage
Answered in the firm's own words. If yours is not here, call — we would rather answer it than have you guess.
What fees does MDR & Associates charge to sell my business?
Our fee structure is 100% performance based. We have an industry-standard success fee if and when we sell your company. If we fail to complete a transaction and complete the sale, you will owe us nothing.
The percentage depends on the size of the transaction and falls as the transaction grows. It is set out in the engagement letter before you sign anything — the full structure, and what a seller pays for separately, is on our fees page.
How long does it take to sell my business?
On average it takes three to nine months for us to sell your company and complete the transaction.
We have closed a transaction in as little as eight days, and we have completed one eighteen months after accepting the engagement. How profitable the business is, how niche it is, and how long it has been established all factor into how long it takes from listing to the wiring of funds.
What is the first step to selling my business?
A complimentary discovery meeting and opinion of value with one or more of the partners of the firm.
In that meeting we listen to your personal goals and objectives and determine whether we can meet them. We review the last three years of financials and give you an opinion of value from low to high, and we discuss your exit options. It costs nothing and commits you to nothing.
Will you keep the sale of my business confidential?
Yes, and the process is built around it rather than promised alongside it. You do not want your employees, clients or competitors to know your business is for sale, and they will not learn it from us.
When buyers inquire about a confidential listing we require them to register before we send any detailed marketing package. Registration includes signing a confidentiality agreement and completing a financial profile that establishes whether they are genuinely capable of purchasing your business. We share the details of your company only with qualified buyers who have completed that process.
Am I obligated to accept an offer when one is presented?
No. We have a fiduciary responsibility to present every offer to you in person. At that point you have three options: accept the offer, reject it, or make a counter-offer.
We give you our advice either way, so that you are not alone in what can be a daunting process.
Who will handle my transaction — a principal, or an associate?
We are a boutique firm and handle a select number of engagements at one time. A VP of Client Engagement will be your main contact through the marketing process.
When the negotiating gets heated, one of the partners of the firm will be in the middle of it and will see it through to closing. You are not handed off.
When is the right time to sell my business?
Typically when your business is growing, and has grown year after year for at least two to three years. Selling when times are good attracts multiple offers and creates a natural fear of loss among buyers.
It is usually not a good time to sell if the company has experienced negative growth year over year — the sale is likely to be perceived as a liquidation, which produces a much lower price and a structure that does not favor the owner.
How do you market a business for sale?
It begins with the discovery meeting, where we establish your story and your value proposition. From there we build the confidential marketing package and an HD marketing video.
We then take the offering first to our own database of qualified individual buyers, capital groups and private equity groups. Most M&A firms rely on the internet to gain traction; we go to our own buyers before your business goes online. Only if that does not produce an acceptable offer do we place a general blind advertisement on the major business-for-sale sites.
What makes a good engagement for MDR & Associates?
A business that is profitable, trackable and bankable, with longevity and a solid value proposition.
The ideal company has management that will stay two to three years after the sale, is scalable, and can be run on an absentee or semi-absentee basis. And the owner is genuinely motivated to proceed with the right structure, the right price and the right buyer.
I already have a buyer. Why would I engage an advisory firm?
Two reasons, and both of them are about money.
First, a buffer between buyer and seller preserves goodwill through a negotiation that gets difficult. An experienced advisor takes the place of the bad guy so that you and your buyer can still work together after closing.
Second, an advisor creates a competitive landscape. A single buyer with no competition sets the price themselves. Competition produces a significantly higher value, and that difference more than covers the success fee.
Why use a professional M&A advisory firm at all?
Because it lets you keep your attention on the business. Owners who try to sell their own company routinely take their focus off the financial performance during the very period a buyer is examining it, and the result is a materially lower price.
Running the business well through the sale is worth more than most owners expect, and it is nearly impossible to do while also running the sale.
What do I do after I sell?
This is the big question in our first discovery meeting, and we treat it as seriously as the financial ones. Sellers who have no picture of what comes next often will not go through with a sale, and should not be pushed into one.
We stay in touch after closing — a substantial part of our work is helping past clients work out what is next, including finding the next business where that is what they want.
Can MDR & Associates help me buy a business?
Yes. Our deal team has assisted many sellers in finding their next business after closing, and we take buy-side engagements from individuals, strategic acquirers and private equity groups.
The starting point is the buyer NDA and a buyer profile — both take a few minutes and neither costs anything.
How long has MDR & Associates been in business?
The firm was founded in 2008, as a main street business brokerage in Texas. In the early years the average transaction was around $500,000.
Over the following decade the firm moved up-market into lower middle market M&A, and today represents owners of companies with $3 million to $100 million in revenue. Every closed transaction we publish is listed by name on our results page, and past clients are happy to speak to prospective ones — ask and we will make the introduction.