Why Use a Business Broker?
Why should you use a Business Broker? If you want to sell a business, this is an important question. Experts show that as many as 90% of business owners fail to sell their businesses (see Forbes.com October 24, 2016, at https://tinyurl.com/u9qxkdk).
Many business owners are asking themselves: How can I sell my business? They are wondering whether they should sell their business themselves.
Business owners wonder if they have what it takes to sell their business on their own or if they should sell their business through Business Broker. They may wonder if the should use a commercial real estate agent?
If they are in a Tampa, do they have to use a Business Broker that’s headquartered in Tampa? Or can they use a broker from another city, like Brandon or Orlando? What kind of qualifications and licenses are required to represent a business for sale?
Here are ten reasons why you should use a Business Broker to sell your business.
1. Effective Pricing Gets Your Business Sold
A professional Business Broker or Business Intermediary can help you get the best price. A knowledgeable Business Broker has access to what is going on in the market on a regular basis. They can provide you with valuable feedback on pricing a business. If you price your business too high, most potential buyers will not even inquire about your business. If you price your business too low, you won’t get what your business is worth. And you will not get what you deserve. You have worked hard and deserve a great price. Many businesses fail to sell because they are overpriced.
2. Saves You Time
Additionally, a good Business Broker will allow you to have more time for running your business and enjoying your private life. Forbes magazine ran an article in 2016 stating that 90% of the time people failed to sell their businesses. It helps to have a professional working for you. Besides running your business, you probably have plenty of other things to do. So why not let Business Broker do all the heavy lifting while you enjoy your time away from your business.
3. Confidentiality for You and Your Business
Most business owners insist on confidentiality when choose to sell a business. Many people who will call about your business have never bought a business before. They are curious. They want to know the facts and basic business information. Many don’t even think that confidentiality is an issue. A Business Broker creates a buffer between you and prospective buyers.
A good Business Broker will make sure that they get a non-disclosure or NDA signed before sharing the information about your business or even learning the name of the business. They can help explain why a prospective buyer will only get so much information before they make an offer. A professional Business Broker will sort out the buyers who are just looking for information. They will take time to educate real potential buyers about the importance of confidentiality. Learn more about the importance of confidentiality at https://buybizusa.wpengine.com/the-confidentiality-agreement/.
4. Utilize Proven Quality Resources
Professional Business Brokers have access to resources and to professionals that know your industry. Because of their experience, they will know which SBA banks are lending (SBA.org). They know experienced attorneys that can help close the sale of a business. And they have a list of great accountants who understand business financials.
5. Negotiation Expertise
Why waste time haggling back-and-forth when you can have a business intermediary support you and represent the price you are looking for? Using a Business Broker can take the stress and the personal element out of the equation.
6. Professional Marketing
A good Business Broker will take time to create a clear and effective comprehensive business review (CBR or CIM) that outlines all the essential details of your business. A properly crafted presentation package will help a buyer fully deeply understand the benefits of acquiring. They will have a great summary share with their acquisition advisors. A strong CBR is a powerful tool to help sell your business. Ask to see samples before you hire a Business Broker.
7. Supportive Financial Representation
Let’s face it. Most business profit and loss statements, and tax returns don’t show a big number at the very bottom line. Since over 90% of the people buying a business I’ve never been through the process before, they find this to be very confusing. Often times I will walk away because of business looks like it’s not making any profit. A good Business Broker, working with you and/or your accountant, ability to communicate and clarify the quantitative elements of your business. This is often referred to as normalizing financial statements, and when explained well and clearly, helps prospective buyers understand the true financial profitability of your business.
8. The Right Connections to Find the Right Buyer
An experienced Business Broker should have developed a long list of possible buyer candidates. A few years back, one of our existing newsletter recipients purchased a business they saw advertised. They had not been looking to purchase a business at the time and had no intention of buying one. But they signed an NDA to learn more. When they found out what the business was, they knew it was a great investment. They made a great offer to purchase the business and own it to this day. Sometimes the best buyers are not searching on the internet for a business. A good business broker can connect you to off-market buyers.
9. The Right Team to Find the Right Buyer
Some Business Brokers would rather sell the business themselves and get full commission. But not every buyer gets to reach out to every Business Broker. A great Business Broker will have a network of fellow professionals and confidential Business Brokers who have their own network of prospective buyers. Work with a broker who is willing to cooperate with other professional brokers. Work with a Business Broker who proactively networks with fellow professional, confidential Business Brokers.
10. Great Tools to Get Your Business Sold
A good Business Broker will pay for, and have access to, a wide array of tools to help sell your business. Therefore, they will have access to forms, databases of possible buyers, data on sold businesses, access to great websites and so on. Ask to see the list of tools and methods a Business Broker will use to sell your business.
Bonus: 11. Business Brokers Should be Properly Licensed
Many states require a real estate licensed for a Business Broker to sell your business. Make sure your broker is properly licensed in your state. You can usually verify an agent by searching your state’s database. Make sure you choose a professional with experience and your needs in mind.
I hope you found this information to be useful. If you have any questions or would like more information about how to sell a business, please reach out to us at any time. your FREE eBook on getting the best price for your business. Just send an email to us at Info@BuyBizUSA.com to request your FREE Seller’s Ebook.
Good luck and thanks for reading my article.
Brian Stephens – Founder of Legacy Business Brokers and BuyBizUSA!