Working with a business broker

j0433118You’ve worked too hard and too long to risk selling your business by yourself. You need a professional who knows how to sell businesses, where to advertise, and has industry contacts. The chances are you’ve not sold many businesses in your career, and now is not the time to learn.

Engaging Your Broker’s Services

When seeking a broker to sell your business, your due diligence is required in selecting the most suitable firm. Some things to think about:

  • You want to know how your broker will advertise your business and their budget for this purpose.
  • If your sale is confidential, you’ll want to know how the broker will advertise, yet keep your identity unknown.
  • Does your broker think a cash sale is best for you, or a price with terms?
  • Determine that the broker is a good fit for your type of business; has the firm previously sold a business of your type and size, and in your location?
  • Remember that time kills deals…so is the broker experienced in moving the process along rapidly?
  • Be clear about the frequency of contact you expect from your broker; if you want frequent updates, say so.
  • Find out how quickly the broker responds to buyer inquiries, and the protocol for moving prospects forward.
  • Inquire about how many listings the broker has and determine if he or she is too busy to be a good selection for you.

Reviewing the engagement proposal

Once you have selected the broker you believe will do the best work for you, the broker will require you to sign an engagement letter detailing your working relationship. This letter states the terms of the services and the fees you will pay. Most engagement letters have standard language; some of the elements you should expect are:

  • The services you are hiring, such as preparing a marketing brochure, working with specialists on your behalf, advertising your business’s availability, filtering inquiries, and recommending worthy prospects.
  • Limitations of the services the broker will provide.
  • A term for performance; 3 – 24 months is typical.
  • Client’s responsibilities in support of the effort.
  • A disclaimer describing the broker’s potential for performance.
  • A description of the fees, discussed below.

The broker’s fee

Brokers are compensated either hourly, through a success fee, by a retainer, or by combinations of these options. Here are some details:

Success Fee: A success fee is a commission based on a percentage of the sale price, or a dollar amount. Typically, a success fee is between 5 – 12% and the smaller the sale, the higher the percentage.

Advisor’s Fee, or Retainer: Brokers expect to be paid for their hard costs and minimal services whether you sell or not. If the sale is successful, their fees may be deducted from the success fee. The retainer may include the advertising budget and other upfront costs the broker will commit to doing, such as meeting with members of your professional team.

Reverse Fee: As mentioned above, most of the time a broker will present a graded fee schedule with a higher fee percentage for a smaller sale price. A reverse fee schedule works like this:

Assume that you and your financial planner have determined your business has a value of $700,000 and you have set this as your top price. The broker tells you they charge 10% on all sales under $1 million. However, the broker also tells you his firm will try to sell your business for over a million, and if they do, will you be willing to pay 15%? Do the math and you’ll see that a reverse fee is desirable.

The previous passage is an excerpt (pp. 359-361) from author Joseph M. Maas’ book “Exit Insight: Getting to Sold,” available online now at Merrell Publishing and Amazon. You can also visit us online or call 206-386-5455 for more information about selling your business.


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It takes a village…

Exit Insight: Getting to Sold!If you’ve been following our blog, you’ve probably seen a number of posts over the last few months about exit planning, a complex topic that can be difficult to understand. Exit planning in its simplest form is a well-constructed plan to help a business owner to exit his or her business at a specific date in the future.

The plan helps the business owner maximize his or her finances which includes increasing the value of the business before its sale or the owner’s retirement. A good exit plan incorporates many moving parts – a personal financial review, a business valuation, an estate plan, a strong investment portfolio and much more.

Synergetic Finance possesses expertise in many of these areas, but we welcome the opportunity to work with other professionals to help our clients achieve their financial goals, including estate planning attorneys, CPAs, insurance advisors, business coaches and others. If you fall into this category and want to partner with us to better serve your clients, we’d love the chance to talk with you. Contact us today to set up a consultation call or visit.

We also encourage you to take a look at founder and CEO Joseph M. Maas’ book Exit Insight: Getting to “Sold!” to learn more about the exit planning process. You can read excerpts from the book on our blog, or you can purchase your own copy at Merrell Publishing or

We look forward to hearing from you!

To your clients’ success,

Author Joseph M. Maas





Synergetic Finance


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Are you for real? Are you ready to sell?

Six Steps to Successful Financial PlanningSelling your business is a big decision and requires a lot of thought and planning. How mentally and financially ready are you to sell your business?

  • When are you seriously thinking about selling? Do you want to sell your business immediately? Or are you thinking about five years from now? 10 years? The more time that’s available before you sell, the higher the probability of receiving a
    higher price and securing a transaction that actually works out.
  • Many businesses aren’t ready for sale, and need to prepare themselves by increasing value and perfecting the many elements such as sales, products/services, facilities, equipment, personnel, brand and documentation.
  • Are you ready to work with a team of professionals whose only focus is to position your business favorably in the market? If your business isn’t freshened, doesn’t have curb appeal, and doesn’t stand up to internal scrutiny, it will never sell.
  • Are you in a financial position to sell? If you need $500,000 on the sale of your business, but the valuation determines a lesser price, you may be unable to sell and will have to stay with your company for several or many more years.

All these topics require self-reflection and a discussion with your financial planner to come to a conclusion about your state of readiness for making a very big change in your life and financial prosperity.

The previous passage is an excerpt (pp. 337-338) from author Joseph M. Maas’ book “Exit Insight: Getting to Sold,” available online now at Merrell Publishing and Amazon. You can also visit us online or call 206-386-5455 for more information about selling your business.



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What kind of investment advisor is right for you?

Synergy takes a holistic approach to financial planningIn February 2013, I wrote a blog post about choosing an investment advisor. A year and a half later, that advice still holds true. When choosing someone to handle one of your most valuable assets – your money – you want to select someone you can trust and who cares about your goals. Here are some tips for selecting the right advisor for you.

1.  Get referrals from family and friends.
2.  Visit the advisor’s website.
3.  Schedule an introductory appointment.
4.  Ask key questions including:

  • How is the advisor compensated for his or her services?
  • Does the advisor represent one company or multiple companies? This will give you an idea of the range of products and services the advisor can offer.
  • Who manages the firm’s portfolio of assets – someone within the company or a middle man? At Synergetic Finance, we manage our portfolio in house.
  • How often will the advisor meet with you to discuss your portfolio, investment results, goals, time line, etc.?
  • Will you get personalized service from an advisor with whom you can develop a long-term relationship?
  • What is the advisor’s fiduciary responsibility? This can vary. A Registered Investment Advisor (RIA) has a fiduciary responsibility to give you the best options for your situation, not just options that are suitable. The wealth managers at Synergetic are RIAs.
  • What is the advisor’s educational background? How long has he or she been in the business? What’s the advisor’s track record for success?

Whether you are investing a few hundred thousand dollars or a million dollars, you want to choose an investment advisor who will put your goals and needs first. If that’s the kind of advisor you want to work with, contact the wealth managers at Synergetic Finance. We can set up a complimentary consultation to learn more about you and your financial goals. Until then, we invite you to visit our website and blog for more info.

To your success,

Author Joseph M. Maas





Synergetic Finance


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Setting estate planning goals

Setting estate planning goalsPart of the exit planning process is doing a personal financial review. A thorough exit plan should include an estate plan as part of the process. As you and your attorney begin planning, consider your goals for an estate plan. Here are some common goals to start the conversation:

  • Secure the financial future of your loved ones
  • Guarantee that assets are distributed to the intended recipients
  • Prevent legal conflicts with third parties
  • Reduce transfer taxes and income taxes as much as possible
  • Limit administrative costs and avoid probate
  • Protect family harmony
  • Assure good relations among business owners
  • Provide for the education of children or grandchildren
  • Contribute to a favorite charity
  • Reduce liabilities that might endanger the estate
  • Guarantee the capable management of the estate
  • Assure sufficient funds for the administrators of the estate

For more information about the estate planning process, within the context of exit planning, check out “Exit Insight: ‘Getting to Sold!’” by author Joseph M. Maas, founder of Synergetic Finance, SFM Advisors, Synergy 401(k) and Merrell Publishing. It’s available for purchase at


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Investment selection, monitoring and control

Exit Insight: What's an exit plan got to do with it?After you and your financial planner have decided on the most appropriate asset classes to include in your investment portfolio, and also have decided on the allocation of assets within the asset classes, the next step is to select the actual investments that are most likely to help your portfolio achieve the desired results.

Here are some excellent criteria you and your financial manager should consider when making investment selections:

  1. Past performance compared to other investments having the same investment objective. Consideration shall be given to both performance rankings over various time frames and consistency of performance.
  2. Costs relative to other funds with similar objectives and investment styles
  3. Size of the fund
  4. Length of time the fund has been in existence, and length of time it has been under the direction of the current manager(s). Also, consider whether or not there have been meaningful changes in the manager’s organization and personnel.
  5. The historical volatility and downside risk of each proposed investment
  6. How well each proposed investment complements other assets in the portfolio
  7. The current economic environment
  8. The likelihood of future investment success, relative to other opportunities

Excerpt from “Exit Insight: Getting to ‘Sold!’” by author Joseph M. Maas, pp. 251-252. For more info. like this, buy the book online now.


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It’s time for a mid-year financial review

It's time for a mid-year financial review.As we enter the second half of 2014, this is a good time to look back at the first six months of the year to see how you are faring financially. We recommend that clients conduct a mid-year financial review to check in on their investments, budgets, savings and tax planning to see if adjustments need to be made. Here are a few key items to look at during your financial review:

Investments: How did your investments perform? Better than expected, worse than expected or about the same? Talk to your investment advisor to see if you want to make adjustments, including rebalancing your portfolio if your risk profile has changed.

Savings: Have you reached your savings goals year-to-date, or do you need to step it up a bit? Consider making an automatic transfer each month from checking to savings to ensure that you are saving consistently. This applies to retirement savings as well as traditional savings.

401(k) plan: If you are contributing to an employer-sponsored 401(k) plan, look at your investments to see how they’re performing. Are new funds available that better suit your needs? Can you afford to increase your contributions to get the maximum match from your employer? Discuss your 401(k)’s performance with your financial advisor to see if it is beneficial to make changes.

Tax withholding: Now that you’ve made it through half the year, you probably have a good idea whether or not your tax withholding is adequate. Do you need to adjust your withholding to ensure that you don’t underpay your taxes, or perhaps you’ve had a child and are eligible for an additional exemption? Use the IRS’s tax withholding calculator to see if you need to make adjustments.

Other areas to consider for your review: insurance, medical spending, quarterly tax payments and budget adjustments.

If you’d like help completing your mid-year financial review, please contact us. We’d be happy to answer your questions and to help you assess and adjust your finances as needed.

To your success,

Author Joseph M. Maas





Synergetic Finance




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What’s your exit strategy? Part 2

(continued from our last blog post)

Good choices

Mark Girouard asks "what's your exit strategy?"A good option for many entrepreneurs includes exiting by being acquired, while continuing to offer help via a consulting contract. This choice may put an investor’s mind at ease, as it’s plausible to envision this while still being at an early stage in your company’s history. The acquirer needs time to get up to speed and offer the same level of service to your existing customers while operating the company. Some owners grow the company to a certain point within a desired sales or profitability range, and then proceed to sell operations to a logical acquirer – someone in your market space with a high level of interest. Strategic buyers like these usually offer the highest price.

As mentioned before, it may make sense to hold on to certain parts of intellectual property including patents on technology, and offer to license the technology to the acquiring company. While the finer points of this type of plan usually require negotiation, having upfront discussions with your investors regarding benefits and risks of your exit will help in raising the initial capital until stability is established.

Once you’ve raised capital and have consistent revenue over a period of time, then your exit plan may change as new realities emerge and the business changes. It is important to understand how these initial options will benefit the company in case you are not to remain there. Through this discussion process, you will carefully express the likelihood of potential events to investors, all while managing your existing stakeholders, and building operational efficiencies that successfully move the company out of the starting gate.

Making an exit statement

A good way to express an exit statement would be “My exit strategy is to be acquired in 3 to 5 years based on a targeted sales # of X or profitability of Y. I’d like to continue to be involved and would like to consult on the continued operations to the acquirer.” This explanation offers a reasonable exit for you and for the investors at this point in time. Being able to clearly state what you and your stakeholders want in all negotiation phases is helpful to complete the transaction in a realistic amount of time that benefits all parties. Communication is essential to the process no matter what the numbers look like.

If you would like to further explore how to prepare for an M&A transaction, or have a formal Business Valuation, please call Synergetic Finance at 206-386-5455.

Also, please check out founder Joseph M. Maas’ new book Exit Insight: Getting to ‘Sold!’ that explains the process in detail of planning and executing a successful company exit.

To your success,

Mark Girouard


Mark Girouard, MBA, AVA, CMA&A
Synergetic Finance


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What’s your exit strategy? Part 1

what's your exit strategy?As part of working with business owners to help grow and sell their companies, Synergetic Finance is often asked by clients to assist in answering an important fundamental question: “What’s your Exit Strategy?” This is not a simple question, however. It depends on who is asking it. Are you being asked by friends and family, or are you asking yourself what you plan to do once you exit the business? Or are you being asked by someone else that is a key stakeholder, such as a potential investor?

There is usually a long term exit strategy (yours) and a short term exit strategy (the investor’s.) The investor group you are raising capital from wants the enterprise to grow according to plan, and is often looking for great returns paid out as quickly as possible – or longer if they are more patient.

Moving beyond friends and family to raise money from professional investors requires developing a new perspective on your capital partners. Your viewpoint may differ slightly in terms of time frame, so it is important to meet and understand your audience appropriately. To successfully raise capital from investors, it is important to craft an answer that keeps them happy, yet positions and builds your business for the long term.

Exit strategy for investors

A proper exit strategy illustrates a realistic outcome for both your and your stakeholders. While your strategy may change over time, exit statements are made from the perspective of the current time, like your company’s value. A financial advisor like Synergetic Finance can help you manage the path from this point in time to a future successful exit.

To illustrate a realistic exit for investors now and to drive liquidity in the near term, there are a number of options to consider and communicate that sound reasonable. Some acceptable options investors like to see include the following: going public, merging, being acquired, and selling operations. Most exit strategies are some combination of these choices.

Selling the company’s operations may include selling parts of the company while holding on to other parts: keeping certain patents, signing licensing agreements, franchising the concept, or offering consulting services until new management is in place. Investors like to explore these potential exit strategies in advance along with the likelihood of achieving their returns in a realistic time frame.

In part 2 of this post, we’ll talk about good choices and making an exit statement. Until then, please let us know if you have any questions, or check out founder Joseph M. Maas’ book Exit Insight: Getting to “Sold!” available online now from Merrell Publishing.

To your success,

Mark Girouard




Mark Girouard, MBA, AVA, CMA&A
Synergetic Finance


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Estate Planning Checklist

estate planning checklistConsidering your own mortality is never a pleasant task, but it is necessary to assist both your family and your business to transition after you’re gone. One way to plan ahead is to work with an experienced estate planner. He or she will provide a list of the information you’ll need to gather so the paperwork necessary to effectuate your wishes can be developed. Your advisor will request many documents some of which are:

  • Wills of both spouses
  • Power of Attorney
  • Directive to Physician
  • Community property agreement
  • Transfer to minor account information
  • Trusts
  • Tax returns
  • Birth and marriage certificates
  • Divorce decrees with settlement information
  • Employee benefits statements
  • Loans information
  • Vehicle registrations
  • Bank and brokerage statements
  • Insurance policies

Excerpt from Exit Insight: Getting to “Sold,” pp. 163

Copyright © 2014 by Joseph M. Maas. All rights reserved.

There are many more steps needed to prepare an appropriate estate plan, but this checklist will get you started. Have questions about estate planning? The financial planning experts at Synergetic Finance can help. Call us today at 206-275-5455 for a complimentary consultation.


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