What is a business broker?
A business broker works with both business buyers and sellers to coordinate successful transactions.
Brokers help sellers market their businesses to potentially interested parties, and they help buyers find sellers that are worth their time and energy.
When you use a broker, you get someone with experience to walk through the buying and selling process with you, helping you avoid pitfalls and make it to a closing.
Why should a seller use a broker?
The decision to sell your business is one of the biggest you’ll ever make, as well as one of the most complicated.
If you’re on the fence about selling your business, here are 6 signs that you should.
Maybe it’s not time to sell, but you just need a little help. Consider investing in a business consultant.
A broker walks through the process with you from start to finish, helping you find strategies for getting the best deal on your business.
With their knowledge and experience, they also help you work through the complications of paperwork, legal issues, and tax concerns.
Here are some reasons to consider using a broker:
Sell for a fair price.
Unless you’re used to selling businesses, it can be hard to tell what yours should go for.
Brokers have the experience to know what’s a fair price, as well as what will get you a sale in the marketplace and what won’t. Using a broker gives you extra protection, reducing the risk that your business won’t sell or that you’ll end up getting less than your business is worth.
Keep it confidential.
When others learn that you are wanting to sell your business, it can cause a stir.
Your clients, staff, suppliers, and others may misunderstand your intentions, which could result in lost customers, worried staff, and suspicious suppliers.
When you use a broker, you can get your business out on the market while keeping your desire to sell confidential.
Cut the confusion.
Ever thought about the legalities and tax implications surrounding the sale of a business?
Brokers have experience dealing with the legal, tax, and financial aspects of the sale, and they walk with you through the process.
With an experienced broker at your side, you diminish the risk that you will miss something or accidentally hurt yourself along the way.
Stay focused on your business.
On average, a business takes about six months to sell.
Though you’re pursuing an exit strategy, until your business is sold, it’s still your responsibility to make sure the business is run, and run well.
Business brokers do the heavy lifting for the sale of your business (marketing, negotiating, handling legal issues, and more), leaving you the time and energy to keep “taking care of business” in the meantime.
Get your maximum value.
Hiring a broker means you get an expert business seller on your team. Brokers know the market and the factors that motivate a buyer.
They know the different types of buyers, and how to market to each type.
Your broker will coach you on changes for your business that can make it more valuable in the eyes of a buyer, helping you achieve the maximum sale price.
Why should a buyer use a broker?
Purchasing a business comes with a lot of risks and questions that you need to answer:
- How do you choose the right one?
- What’s the best way to make sure the seller isn’t hiding anything?
- How can you really know you’re paying a fair price?
It’s a difficult task, but it’s not something that you need to do alone. Adding an expert broker to your team can help you conduct a fruitful search that ends in a great deal for both you and the seller.
Here are some ways that a broker can help:
Access the business marketplace.
Working with a broker is one of the easiest ways for a buyer to access the business marketplace. Without a broker, you have to conduct the search yourself, which typically confines you to a smaller pool of candidates. Brokerage services help you find a wide, varied range of business options from which you can choose.
Lessen your risk.
Good brokers pre-screen their sellers to ensure they’re reputable and financially sound, meaning you can have greater confidence that you’re looking at businesses that are worth your time. When you work with a trusted broker, you lessen the risk of hidden surprises and financial frustrations down the road.
Find the right fit.
Buying a business is a big life decision, with consequences that are more than just financial. Nearly all brokers do great helping you find a business that matches your budget, but good ones also help you find a business that matches your passions, interests, and skills. With brokerage services, you increase your odds of finding a business you really love.
Get the answers you need.
When you go into a conversation with a seller, you’re usually also going into a conversation with someone who has poured blood, sweat, and tears into starting and building their business. However professional the transaction, it’s nearly impossible to cut all emotion out of it. Using a broker provides a buffer for you, as the buyer, to ask the questions you really want to ask and to get the upfront answers you need.
Negotiate the best price.
Because the broker acts as a buffer, they also can help you achieve a price that makes sense for you and for the buyer. When you go into negotiations with a broker, you go into negotiations with someone who knows the going rate for a business of that size in that industry, as well as the current state of the marketplace. Their expertise helps you get a deal you can feel confident about.
Close the deal.
A broker will provide professional guidance to you and the seller as you walk through the complicated rules and regulations surrounding the closing of your deal. Brokers stay up-to-date on all of the laws that affect business transactions, and they’re a priceless resource for helping you ensure you follow every step and nuance of the process.
Making the right decision
Whether selling or buying, the transaction surrounding a business is no small move. It’s a complicated, time-consuming process, with ramifications that can reach beyond your finances.
#Business #brokerage is becoming a necessity as of late. Even more important is finding a good, experienced #broker with a large client list and connections. In our most recent blog post, we shared “Five Reasons Why Your Business Needs a Broker” at https://t.co/p5lHxl0jSi. pic.twitter.com/giTsOEOSim— Winning Hand Corporation (@HandWinning) December 2, 2020
Rarely is buying or selling a business just a financial decision—it’s a life decision.
Maybe it’s time to retire, and you need an exit strategy. You’ve worked for years building a business worth selling, and you want to see it placed in the right hands.
Or maybe you’re a first-time buyer, one who’s worked hard and saved up over the years so you can purchase something you’re really proud of.
Whatever your story, you’re making a big life choice; and just like any life choice, it’s best not to go it alone.
Bringing an expert on board for the journey will help you navigate the pitfalls you discover along the way.
With the right help, you can make it to the destination you’re looking for.
Contact us if you’d like to learn more about how Winning Hand Business Brokerage can help you buy or sell your business.