What exactly is a business broker? And why work with one to buy or sell a business? If you are looking to buy a new business or sell a current one these are some of the questions you may be asking yourself… Therefore, we have put together the following article to explain the importance of a broker in selling/buying businesses.
What is a Business Broker?
So, what actually is a Business Broker? Essentially, a Business Broker specialises in the facilitation of the purchase or sale of a business. They act on behalf of the buyer or seller for a success fee, if the business is acquired/sold.
For instance, when selling a business, a Broker will begin with assessing the business, collating financials and any other relevant documents. They are there to advise you on anything the business is lacking, explain the impact this may have and how to improve the business. Then, they will suggest a potential selling price, find eligible buyers, negotiate a deal and liaise with buyers until settlement has taken place.
What Makes a Good Broker?
How can I tell what makes a good Business Broker? Well, the first major tell-tale sign is communication and interpersonal skills. A good Broker requires great people skills, as these are crucial to developing quality connections.
Good connections = Greater potential buyers and a smoother sales process overall
Not to mention, it is important that your Broker has relevant experience dealing with the business of interest. How many of these experiences have ended up in a sale and how long did this process take? Note: Don’t hesitate to ask questions or even book a consultation session before deciding on a particular broker.
Finally, how interested is this Broker in understanding your business? A good Broker will take the time to learn your reasons for selling and associated goals. Not to mention, your interests should always be prioritised over the potential buyers.
Why Use a Business Broker?
Buying or selling a business can be quite an overwhelming experience and a tedious process. Therefore, there are many advantages to working with a Broker – particularly if it’s your first time buying or selling! A Broker is like hiring a tourist guide, they know the country like the back of their hand and are able to guide you through the process comfortably…
Here are just some of the advantages… a Business Broker:
- Has experience in valuing and selling businesses – understands how to evaluate your business, set the best asking price and facilitate the entire sales process.
- Knows potential buyers – these buyers may include individuals, businesses or private equity groups.
- Knows how to market your business to potential buyers – targets buyers who appreciate a businesses key values.
- Bring objectivity into the process – buying or selling a business can be quite emotional, therefore a business broker negotiates the sale from an objective point of view on your behalf.
- Already has businesses for sale – this attracts more potential buyers and increases overall exposure for your business.
- Maintains confidentiality – employee and customer information is kept discrete to ensure the business is able to operate as per usual
- Has strong negotiation skills – to ensure that you get the best deal possible.
- Does all the paperwork for you – buying or selling a business requires a hefty amount of paperwork, a broker would complete and submit this all for you
Overall, a Business Broker reduces the stress and personal resources involved in selling or buying a business; allowing you to continue running your business as usual and start focusing on your future.
Here at BUSINESSNAV, we take a hands-on approach to buying and selling businesses, evaluating your business and achieving the best price.
Contact us here for more information.