Matt and Liz Raad

Business Brokers: 3 Things you should know when engaging a Business Broker

When you have decided to buy and sell a business, it is a good idea to engage a business broker to guide you through the buying and selling process as safe and smoothly as possible.

As a seller the business broker can take on a large part of the actual business sale process for you and help you enormously with your exit strategy. In the case of buying a business, brokers inevitably end up as pseudo business advisors and can give you many profitable business ideas to help you buy a business.

1. A business broker can help coordinating your professional team of business advisors

If you buy and sell a business, the broker takes on the intermediary role and helps coordinate the entire team of professionals required to bring the business sale/purchase to a satisfactory outcome. In some cases the broker might advise or at least point out where to find appropriate, reliable business advisors such as accountants or lawyers if you do not already have your own. The broker will know at what stage to involve who and which documents are necessary to be prepared so it is a good idea to have a good broker who can coordinate and motivate the team well.

2. You can ask to be fully involved in the business sale — or not

Depending on your personal situation, you might like to be fully involved in your business sale or purchase of a business or you might like to rely on a professional business advisor such as the business broker to look after all aspects for you. As a business seller, meeting all the potential buyers can be a good experience or you may prefer to leave the screening of the buyers to the broker so you can get on with your business.

If you are looking to buy a business you may have your own “buying a business checklist” or you may prefer to rely on the broker to get all the relevant information for you. Either way, a business broker is a qualified and ideal intermediary to help in the purchase or sale of a business.

3. Profitable business ideas – It’s not always about the money

Business sales and the final deal are made in many ways and price should not be your sole requirement towards a successful outcome for the purchase or sale of a business. If you look at price only you may actually lose out on potentially better buyers or a better deal on either side of the buy and sell a business game. A business broker should have many profitable business ideas to help make the deal work. Some of the best business ideas to consider in a business sale would be options such as vendor finance, earn-out plans, no money down strategies, extended settlement, extended hand-over assistance or other ways to negotiate a successful outcome for all parties. Tact and excellent negotiation skills are required in such deals and a broker will be more able and objective in creating such deals for you.

The Final On Business Brokers…

Beware of business advisors who make comments or statements about your industry of which they clearly know nothing, and most of all, ask for clarification whenever you do not understand the jargon or meaning of something in the sale process.

While you most likely are quite capable of playing the buy and sell a business game alone, the many steps on the way are not to be taken in a casual manner and by engaging professional business advisors — and specifically I mean business brokers, you will avoid many costly and time consuming mistakes and ultimately achieve a far better result when you buy a business or implement your exit strategy.