Note from Larissa… Following our Fix This Next Series we want to bring your awareness to professionals that niche in solving the issues you may face. Today, we’re interviewing Shailendra Gupta, a business broker and M&A Advisor who specializes in selling businesses between the 500 thousand and 100 million revenue range. If you’re looking to sell your business in the next few years, this interview is for you.
Shailendra Gupta got his start in corporate strategy and corporate development over 20 years ago. If you are unaware, corporate development is the process of scouting and purchasing businesses for a much larger corporation. Then, in his own words he had a classic case of corporate burnout. Now as an M&A advisor, Shailendra uses his skills to help sell businesses that make anywhere between $500K-$100M in revenue.
“Smaller businesses might know their industry inside and out, but they don’t have the skills to (make these kinds of transactions.) I figured there was a need, and it’s been very rewarding to help these smaller business owners be rewarded for their hard work and investment.”
Although, he has had some surprises on the way.
The fact that Shailendra sees a need, combined with the influx of buyers, points to something important: there’s still a lot of confusion around this process. At Sooter Consulting, our goal is to bring clarity to financial decisions—and this is one of those areas where clarity makes all the difference.
Here’s how you can gain the advantage in this “boom period”: Clean financial records. Here’s what Shailendra has to say:
So, because clean financials are this important, what does Shailendra wish more accounting firms did to help him serve his clients?
“It’s a very good question, and I was talking to a bookkeeper this morning about this as well. I just wish more accountants and bookkeepers would keep their clients honest… I understand that accountants are limited by the data coming from the client, but if it’s garbage in (it’s going to be) garbage out. Which goes from the client to the accountant and then to the CPA and now it’s on the tax return.”
Effectively, bad data creates a mess that must be untangled throughout the sales process. Inventory, in particular, is one of the easiest areas for things to become messy.
However, there is one more thing… occasionally, he will have a client come to him with false expectations about what they can make from their business. “I once had a situation where I told a client “your business’s worth is approximately 3 times your seller’s discretionary earnings… which is the adjusted profit of the business. They replied with “but my accountant said my business was worth 3 times the revenue.” He said it wasn’t a common problem, but he does wish that accountants that wanted to give advice that’s outside their area of expertise would instead refer their clients to the right professional.
So, if you’re an accountant the two key take-aways for you are honesty and recommending the right people. If you haven’t, it’s time to start developing your list of professionals that you can recommend to your clients. After all, the goal is to provide the most value to your clients
One final insight before we wrap up: I asked Shailendra what question he is asked most frequently.
He told me that most of his clients are concerned with the duration of the sale or the price – which can vary for each business. On average, a small, main-street business can take 9-10 months to sell, while a larger business may take much longer. Clients also ask about the fees involved, which is a good question because the fee structure of the industry isn’t standardized. Also, there are a lot of unqualified people offering these services at varying fee levels. Just make sure you are working with someone who specializes in selling only businesses – not real estate agents or any other type of professional.
If you’re considering buying or selling a business, understanding this process early can make a significant difference—and working with the right professionals is a big part of that. We can’t recommend Shailendra enough.
If you want to know more, check him out on his LinkedIN or his website!