Should I use a broker to sell my business in Florida?

Get a full spectrum business valuation today! Sell my business now

Why Using a Qualified M&A Broker or Business Broker is Essential for Selling Your Business

Selling a business is a complex, high-stakes process that requires expertise, experience, and meticulous planning. While it’s technically possible to sell a business on your own, the benefits of using a qualified M&A broker or business broker far outweigh the challenges of going solo. This post covers the essential aspects of why partnering with a licensed and experienced broker makes a significant difference, especially in states like Florida that require specific licensing for business transactions. Here’s what you need to know.

Can I Sell My Business on My Own?

Yes, it’s possible to sell your business without a broker. However, the process is anything but simple. Selling a business can involve as many as 200 tasks, each demanding your attention, time, and energy. You’ll need to handle everything from assessing the market to keeping the sale confidential and setting up a secure electronic room for document storage. Here are some key steps:

  1. Realistic and Supportable Valuation: This is crucial, particularly if you’re selling to a family member, partner, or long-time employee. Having an independent valuation ensures you’re not undervaluing or overvaluing the business, which could lead to financial and relational strain. A Market Assessment of Price (MAP) by an independent valuation expert provides you with a fair, supportable price.
  2. Maintain Confidentiality: One of the biggest concerns when selling a business is keeping the sale confidential until the right time. Always use a Non-Disclosure Agreement (NDA) or Confidentiality Agreement (CA) before disclosing sensitive information about your business to potential buyers. Sharing details like customer identities, supplier information, or operational manuals too early can compromise your competitive edge and put your business at risk.
  3. Time, Energy, and Financial Investment: Without a broker, you’ll need to dedicate considerable time and money to market the business, negotiate with buyers, and complete the transaction—all while keeping your business running smoothly.

Can My Real Estate Agent Sell It?

Real estate agents sell properties, but brokering businesses is an entirely different discipline. In Florida, business brokers operate under the Division of Real Estate, which requires a specialized license and understanding of the complexities involved in a business sale. Selling a business demands a distinct set of skills, tools, and connections that differ vastly from selling homes or commercial properties. Here’s why a qualified business broker is the right choice:

  1. Legal Requirements: States like Florida require brokers handling business sales to be licensed to ensure they meet professional and ethical standards. When selecting a broker, make sure they have the appropriate credentials and licenses. Visit the Division of Real Estate (www.MyFlorida.com) to verify a broker’s standing and credentials.
  2. Specialized Skills and Tools: While residential agents might offer a competitive rate, they generally lack the specialized networks and tools needed to sell businesses effectively. A business sale involves tasks like structuring complex financials, developing a targeted marketing strategy, and conducting comprehensive due diligence. Business brokers are specifically trained to handle these aspects and are much more likely to have access to networks of qualified buyers.
  3. Professional Certifications: Look for brokers with credible certifications, such as the Certified Business Intermediary (CBI) designation from the International Business Brokers Association (IBBA). This certification reflects a broker’s commitment to professional standards and experience, providing reassurance that they understand the nuances of a successful business sale. Legacy Venture Group goes further by providing in-depth training for its agents, ensuring that they are Professional Business Intermediaries (PBIs) with hands-on experience.

What Qualifications Should a Broker Have?

When evaluating brokers, look for a regionally established office with a strong reputation and a professional approach to valuation and marketing. A qualified broker or brokerage firm will demonstrate:

  • Industry Experience: Ensure the broker has a track record in your specific industry or with similar business types. Look for firms that have been in the industry for years and can provide references and examples of past sales.
  • Certification and Licensing: As mentioned, proper licensing is mandatory in states like Florida, and additional certifications like the CBI indicate a high level of expertise.
  • Respect and Professionalism: A good broker will treat you and your business with respect, taking the time to understand your unique goals and concerns. Selling a business isn’t just a transaction; it’s a transition, and a supportive broker can make the process smoother and more successful.

“My CPA Does Such a Good Job That My Taxes Don’t Show All the Value of My Business”

It’s common for businesses to minimize their taxable income, but this can complicate a business sale. Potential buyers need a clear picture of your business’s true profitability to make a fair offer. This is typically represented by Seller’s Discretionary Earnings (SDE), which adjusts your net profit to account for non-recurring expenses, owner compensation, and other non-operational expenses. An experienced broker will work with your CPA to:

  1. Present SDE Accurately: Buyers want to see the business’s full earning potential, not just what’s left after tax deductions. SDE shows the potential profitability of the business under a new owner, including add-backs like non-cash expenses, owner benefits, and one-time expenses.
  2. Prepare Clean Financial Statements: Properly prepared financial statements are essential to maximize the business’s value. Adjustments to your net profit are usually necessary to display the total value of your business. Some brokers may also use “Cash Flow” as a shorthand for SDE, but make sure your financials are accurate and professionally presented to avoid misunderstandings with potential buyers.

Why Legacy Venture Group?

At Legacy Venture Group, our Florida business brokers  are committed to providing our clients with the highest standard of service, professionalism, and confidentiality. Our business brokers undergo rigorous training to ensure they are fully prepared to handle the complexities of a business sale, from valuation to closing. Managed by active CBIs, Legacy Venture Group has extensive experience in helping business owners achieve their transition goals. Here’s what we bring to the table:

  • Extensive Training for Our Brokers: Legacy Venture Group agents receive in-depth training, including comprehensive coursework and field experience, equipping them to be top-tier Professional Business Intermediaries.
  • Dedicated Marketing and Buyer Networks: We have access to a vast network of buyers and investors, which significantly increases the likelihood of finding the right buyer quickly.
  • Comprehensive Valuation and Market Strategy: Our brokers conduct a thorough valuation, backed by market research and financial analysis, to set a fair and competitive price for your business.
  • Commitment to Confidentiality: We understand the importance of confidentiality when selling a business. Our processes are designed to protect your business’s information at every stage, from initial inquiries to final negotiations.

Final Thoughts

Selling your business is a life-changing event, and using a licensed, qualified broker can make the experience smoother, more profitable, and less stressful. A certified business broker not only simplifies the process but also ensures that your interests are represented professionally and ethically.

As with any major life decision, it pays to have experts on your side. So, while it’s technically possible to sell your business independently, partnering with a qualified broker is the smart choice.

At Legacy Venture Group, we pride ourselves on the experience, expertise, and dedication we bring to each client relationship. Our brokers are here to guide you every step of the way, ensuring that you receive the best possible outcome for your hard work and dedication to your business.

Meet some great business advisors at BTC  BTCTampa.com

Asking yourself “when should I sell my business?” https://buybizusa.com/seller-registration/ 

Check our business valuation training organization: NACVA: https://www.nacva.com/directory.asp

Check out Brian Stephens at IBBA: https://www.ibba.org/broker-profile/florida/brandon/brian-stephens/

Business Value Score: https://score.valuebuildersystem.com/legacy-venture-group/brian-stephens

FREE E-Book: https://bit.ly/3K0oTYN