Since the credit crisis began chokingliquidity last fall, many clients who want to sell businesses have had to rethink their plans. Financing is scarce; cash-strapped lenders have become finicky about extending loans. The resulting environment is one of greater scrutiny, fewer deals and lower prices.

You may have been advising clients to wait until the economy turns around to put their businesses on the market. For many business owners, however, selling is the only route to a comfortable retirement. They may not want to wait—or they may feel that they can't because they no longer have the energy to run their companies.

But not selling bears its own risks. "I've watched owners try to hang on to companies too long," says Jon Goetze, managing director for transaction services at Chartwell Capital Solutions, a business valuation and transition consultancy in Minneapolis. Goetze recalls a client with whom he first discussed selling five years ago, when the client was 65. "In two years, he's gone from owning a business worth millions to owning one worth virtually nothing because he didn't have the energy or insight to keep it healthy," Goetze says.

Team Effort

Advising business owners is a specialized area. Though some planners have this expertise, many bring in specialists, such as a business broker, investment banker, mergers and acquisitions consultant, business transition consultant or sometimes a consultant who specializes in the client's particular industry.

Typically, the financial advisor does not negotiate the deal, says Joseph Fahey, national director of business planning services for Wachovia Wealth Management. The planner is there to sit on the same side of the table as the business owner, play devil's advocate and ask tough questions while the specialist sets the negotiating agenda.

The client should also have an attorney and an accountant on the sales team, says Teresa Cherry, a principal of The Family Wealth Collective in Chicago, which advises families with businesses. Planners who bring in expert advisors for a sale, she says, are freer to focus on crafting deal terms to mesh with the client's tax, insurance and estate plans—and altering those plans if necessary.

Of course, everyone must get paid. Business owners may find themselves doling out 10% or more of the sales price of their business to various experts. Your assistance in assembling and vetting an appropriate team may comfort valued clients already facing difficulties in a tough market.

It's important to fit the banker or broker to the deal, making sure that the prospective sale fits within his or her "sweet spot" of typical work. "You don't want someone who is not interested in this particular deal because it's outside their typical size or value range," Fahey says.

Who Will Buy?

Generally, business buyers fall into two camps: strategic and financial. To simplify, strategic buyers want your business, and financial buyers want to profit from your business. Several years ago, financial buyers, including hedge funds and some private equity firms, sustained a sellers' market. Now, tight credit is forcing many financial buyers to the sidelines. Today, therefore, most transactions involve strategic buyers in the same or a related industry.

"Strategic buyers have capital," says Brian Keane, managing director and group head for Citi Capital Strategies in Washington, D.C. All but two of the 20 or so deals that his group brokered in 2008 have involved strategic buyers.

Today's strategic buyers will likely offer your clients less than they would have a year or two ago. But prices tend to hold up better for companies that are well positioned because of unique products, competitive intellectual property or strategic distribution chains. A buyer may produce software that dovetails with a program produced by the seller, for instance, or a buyer might be seeking to expand into states where the seller has established a dominant distribution network.

In the past, private equity firms were typically interested in companies that had potential for improvement and resale to a larger private equity firm or a strategic buyer. But Keane says today's buyers tend not to be interested in fixer-uppers since their goals tend to be less about potential and more about performance.

"It's hard to sell a company that may have strategic value but isn't profitable," he says. "Now, you need a proven business with some stability and solid expectations for 12 months out."

Best Prospects

Not all owners will have to struggle to find buyers. Owners of businesses that aren't getting hammered by the recession, of course, have prospects for far better deals. "The last three or four pitches we've done have all been in sectors that, arguably, won't be affected by an adverse turn in the macroeconomic environment," says Glenn Gurtcheff, managing director of Harris Williams and Co., an investment bank in Richmond, Va. One of them is a company that sells canned tuna. "Do people eat more or less tuna fish when times are hard?" he asks rhetorically. Other companies Gurtcheff's firm has worked with include a used textbook vendor and a discount coupon processor.