When you deal with business brokers to help you sell your business there are a few things to keep in mind. You should have some expectations of what business brokers can do for you and what skills they can bring to the table to help you find the right buyer.
One of the main questions you need to ask business brokers is how they will help you prepare your business to be sold? Will they be able to indicate to you certain actions you can take immediately to help your business shine in the eyes of a buyer? For instance, can they advise you on how your shop presents? Perhaps some quick improvements or changes can be made. They can let you know some of the common questions that are asked by business buyers to help you anticipate what information you will need to prepare. Example – do you have your financial information in order, have you retained the services of an accountant and lawyer to help guide you through the process and so on. Experienced business brokers can point out some of the quicker issues that can be resolved immediately before you start meeting buyers.
Business brokers can also help you establish a selling price for your business. They can guide you through the methodology to derive a fair price. There are different business valuation techniques that can be used – earnings multiples, asset-based valuation, discounted futures cashflow method, etc. While you may not need to know the ‘nuts and bolts’ of these techniques used to value a business, good business brokers should make you understand the logic and though process used to determine a selling price. Also, don’t merely rely on the value a business broker may help you derive. Talk to your accountant or a business valuator – a good broker should have no problem if you decide to do this. If they do, then that can be a red flag.
Good business brokers will maintain the confidentiality of the business sale while they find you a good buyer. Selling a business is a much different process than selling real estate and reputable business brokers should be able to keep your confidentiality intact.
A business broker will help you present your business to business buyers. They will assist in the communication process and ensure that there is full transparency on the part of the buyer and seller of the company. Business brokers will be the go-between to ensure no misunderstandings and to make sure all questions are answered.
A business broker will also help in the negotiation between the buyer and seller and properly present the offer to purchases as well as subsequent counter-offers, etc.
During the due diligence process, business brokers can be good intermediaries as well. Selling a business requires that buyers confirm facts and do a thorough examination of the business. This can be a lengthy process and complicated or, with the services of competent business brokers, be much smoother and less difficult. Many deals are lost during due diligence that ultimately resulted in flared passions and misunderstandings. A business intermediary can help mitigate this.
Please remember that selling a business is a completely different process from selling real estate. Competent busies brokers are trained and licensed professionals that will help you ultimately realize your business sale, which is the ultimate goal.