Selling a business can prove to be daunting; you have devoted numerous resources into starting, building and operating it. Having made the decision to sell, it’s important to get the best professional guidance available. Luckily, there’s a whole industry dedicated to such deals so if you’re unsure of how to sell your business, engaging a broker could be the way to go.
The Sale Process
Working with a professional could make the difference between getting the best price and terms, and just getting rid of a lifetime’s work. Due to the complicated nature of this process, the broker’s experience will help smoothen any bumps to come up with a win-win for both parties. There are several other reasons why a broker comes in handy in such deals.
As the proprietor, you’re probably occupied with various tasks revolving around the firm’s day-to-day operations. During the sale, you’ll still need to maintain a focus on fulfilling your role, because the business needs to remain profitable all along. The broker will handle all the necessary groundwork in marketing, vetting interested buyers, and also organizing the required paperwork.
Fair Market Valuation
Due to the different kinds of businesses, along with numerous variables that affect their value, putting a price on a business is quite complicated. As the proprietor, you’ll seek the best possible price; yet, setting the bar too high could dissuade potential buyers. If several qualified candidates bid to acquire the venture, you’ll most likely feel comfortable that you got the best deal.
This is made possible thanks to the resources possessed by the broker. With their knowledge of prevailing market conditions, they could offer an insight of what prices to expect and arrange a formal appraisal if necessary. Experienced brokers will have access to records of recent similar deals that could offer reference points and guide on setting the best price.
Not only does the broker help in preparations for the sale, they can also help present your business in the best light to interested investors. Since they know the essentials that such parties would take interest in, they could assist in making modifications that could push up the selling price. Besides getting referrals from other professionals- like lenders, most brokerage firms also maintain a database of qualified investors.
They also have the resources and tools to give the business maximum exposure. This involves a multi-pronged strategy that could include direct mail, internet and print ads. Collectively, all these would be far more effective than you could possibly manage to do as an individual.
Discretion is absolutely necessary as far as changes in business ownership are concerned. If word gets around that new owners are coming in, employees could get nervous. Creditors and suppliers may also stop doing business with you if the news leaks.
A broker will help maintain confidentiality while vetting prospective buyers, only contacting those who qualify via a blind profile. This is a document that describes the firm while keeping its identity concealed. They could also require the incoming buyers to sign a non-disclosure agreement, and provide a financial statement to prove that they can produce the required cash.
While a typical business seller will only have undertaken one or a few deals of this nature, most investors will usually have acquired multiple ventures. An experienced broker will help level the playing field for the inexperienced proprietor. They will know how to structure each transaction properly, and the best way to acquire any essential financing, besides the necessary paperwork.
The broker will have access to other professionals who facilitate the due diligence and legal processes to eliminate any underlying risks. Since their primary role is to sell the venture, there’s a higher chance of getting the deal closed quickly. Any delays could result in predatory competition, customer defection, and employee problems.
Therefore, it’s important to choose the right broker in order to get the best sale price for your business. If handled improperly, the sale process could leave the enterprise lying on the market for a long time. As such, you need to choose a skilled, experienced broker to sell the business in the shortest period possible, and for the highest price.
Attributes of a Pro
The best brokers will have specialized experience; you need to find one whose specialty is selling ventures similar to yours. Otherwise, a talented broker could find it daunting to sell your business due to lack of experience in the sector. They also need to be well versed in the specific geographic market, as well as price range, so that their marketing efforts meet the proprietor’s sale objectives. You need to be wary if the broker is unwilling or unable to provide proof of their track record.
The broker should also provide a list of previous clients with whom you can follow up to verify the veracity of the information. Here, you should inquire about the broker’s personal attributes, styles, strengths and weaknesses. Afterwards, you can weigh all these down to consider how they could augment your objectives.
A good broker should also have the right connections; anyone who claims they can handle the entire process single-handedly would be lying. They should instead have established connections with accountants, lawyers, and other professionals. Even if you want to use your own accountant or lawyer, it’s still nice to know that the broker is well-respected by such professionals.
Finding the Best Broker
One of the most common ways to find a good broker is via referrals. This involves looking up business listings in your area to identify who’s handling them. Afterwards, you can verify their qualifications using contacts within your industry. When doing this, it’s important to maintain a low profile all along. You can also use reputable online directories to identify the best brokers within your area. If you’re looking to sell your business, you’ll need every advantage you can get. A professional broker‘s knowledge and experience are absolutely vital as far as such deals are concerned. Hiring a broker helps minimize the risk by bringing their expertise into the transaction, thus helping you sell quicker and profitably.Tags: Business Broker, Sell Your Business, Selling Your Business