Business Brokers, Why hiring the right broker can make or break the Sale

POSTED IN Buy And Sell Business, Negotiation, Selling A Business

If you are thinking about how to sell your business and have considered handling the business sale process on your own in order to ‘save’ on business brokers fees..STOP!

Now obviously I am biased but if you want to sell your business and even if you are looking to buy a business you need to have a business broker on board. For 95% of business sellers/buyers valuing a business for sale is a completely unknown business skill. Also it can be very challenging having to deal with all aspects of a business sale or purchase by yourself and a good business broker will be experienced and able to steer you through the process with ease.

Why do I need a Broker to Sell my Business?

Selling a business requires specialised business sales knowledge. It is not like selling real estate. There are many variables involved and often highly specialised skills are required to sell your business, especially in two key areas:

  1. Valuing a business for sale
  2. Actually getting the deal completed and over the line

A good business broker will have the specific experience that other standard business advisors or you the vendor just don’t have. They will often have access to currently qualified business buyers and will be able to evaluate how serious or suitable they really are. Also why it is important to sell your business with a business Broker is the project management role a Broker can take on allowing you as the vendor to continue to look after the day to day running of your business.

“How Do You Sell A Business?” Negotiation: the key to successfully completing the business sale…

As business advisors, whenever we are asked “How do you sell a business?” we always discuss the hugely important aspect of the business sale process which is the negotiation skills of the business broker.

Negotiation is a crucial factor for achieving a successful business sale and is the number one area we find most vendors handle very poorly because they are too emotionally attached to the outcome of the sale of their own business.

Our experience is that having the right negotiator or business broker can make or break the sale of your business.

Negotiation includes staying in contact with the prospective business buyer, showing tenacity in working out a good outcome for all parties, and being sensitive and approachable at all times.

What can I expect Business Brokers to do for me?

An important part of the business broker’s role is to get to know enough about your business and your industry so a selling memorandum can be created. This will also play a key role in valuing a business for sale. The descriptions and information provided in the selling memorandum are the first impression a potential business buyer gets of your business and should be designed to entice the business buyer to want to find out more.

Furthermore, the Broker can help you manage other professionals involved in the business sale such as the Accountant and Lawyer and bring them all together as a team. As the Broker is involved at the overview level of the sale, he/she will know best when to start the actions and preparation of relevant documentation.

How do I find the Right Business Broker for me?

You can examine the Business Brokers experience, qualifications and industry knowledge but ultimately, deciding factors should be that you can work with the personality the Broker displays and whether he/she shows commitment to be your guide and bring the business sale to a satisfactory outcome for you and your business buyer.

When you approach business brokers gauge the amount of enthusiasm and the type of questions he/she is asking. This will give you a feel for the level of interest and knowledge in your business ideas and therefore the sale.

The most important selection criteria for your business advisors:

In addition to the obvious “are they capable” and “are they go-getters” etc, we suggest that ultimately, the most important determining factors for your business advisors are:

  • do you like them?
  • do you trust them?
  • and are they responsive?

Because remember that you are handing over the sale of your business (your livelihood and often life’s work) to this person AND you will be working closely with them for some time, so you need to trust them completely as a business advisor.

Final Thoughts on Business Brokers…

Good business brokers are invaluable not only in valuing a business for sale and business sale negotiations, but also in helping you with your overall exit strategy and ensuring that you sell your business for more money than if you tried to do it yourself.

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