Do You Really Need a Business Broker to Get You the Best Deal for Your Business Sale?

by Darwin on June 19, 2020

Once you have settled on the decision to sell your business, comes the biggest question. Whether you want to hire a broker or not. On one hand, hiring a broker means an added expense that will go out of your profit. On the other hand, hiring a broker means that you don’t have to deal with each aspect of the sale and keep managing your business. Selling a business can be a lengthy affair and if you try to take the matter head-on, chances are that you won’t be able to put as much time in your business as you normally do. This can result in business loss or devaluation of your business and eventually make you lose money.

Professional brokers can imbibe a certain amount of value to the sale of your business. They know the details of the business and can ensure a smooth transaction to close the deal successfully. Here we are going to discuss how business brokers can help you to get the best possible deal without the added headaches.

Valuation of Your Business

 

A business broker would be bound by duty to represent you sincerely and impartially. It is also a broker’s responsibility to fetch the highest possible price for your business. This would be for the benefit of the broker as well since they charge a percentage of the sale value as commission. Business brokers will help you take a closer look at your business model, its strengths, and its financials. You might get insights that you did not consider before and had a lower figure in your mind. They will also guide you to present your business and its financials to a prospective buyer in a manner so that the buyer is impressed. 

Keep It a Secret

 

When you are selling your business, there are many factors that you might not want to be disclosed before you are sure about the buyer. Maintaining confidentiality in the market becomes a very difficult task once the news of a possibility of the sale of your business spreads out. A leak of information prematurely can affect your employees, stakeholders, and customers. It might also damage the reputation of your business and decrease the possible sale value. Business brokers are bound to maintain the secrecy of the sale. They can be a one-point contact for you while you conduct the sale and help you to maintain the secrecy until you are ready to disclose it. 

Organization and Preparation

 

Just like any other business transaction, selling your business involves a lot of paperwork. A business broker can organize the required documentation such as tax returns, licenses, a list of FF&E, and many others. This will ensure that you do not miss out on a certain required document in the information package. They can also advise you on the documents you should highlight to get the maximum valuation for your business.

Vetting Prospective Buyers

 

Not every person who approaches to buy your business will have the capability or intent to do so. Researching every prospective buyer can be a tedious and cumbersome task. Business brokers can determine if a prospective buyer has the funding capacity, intention or required experience to buy your business. Brokers have a better knowledge of the right questions to filter through the possible buyers. 

Proper Marketing

 

Posting ads about the sale of your business along with a short description is not enough to attract the best buyers. Think of the sale of your business in terms of the sale of your products or services. Just like you need marketing to be able to generate high revenues, your business needs marketing in the right avenues to attract the best possible buyers. Business brokers develop a thorough marketing strategy to properly advertise your business. They also execute the strategy and follow through with it so that you can sell your business timely and successfully.

Additional Expenses

 

There might be additional expenses that you have not accounted for in your budget such as:

 

  • Your landlord might charge you for leaving the premises before the completion of your lease period. 
  • Lawyer fees
  • Renewal of permits
  • Security deposits
  • Transfer charges for utilities

Brokers can advise as to which all might be applicable for you so that you can prepare on how to deal with them. 

Hiring a broker is a two-way street and certain factors need your cooperation as well. The broker would need an honest disclosure about the business, its finances, and the FF&E. Despite adequate efforts from brokers, the sale of your business might be affected by many other factors of the marketplace. So it is important to remember that the broker is on your team.

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