The process of selling a business is extremely detailed and complex. While you can certainly do it alone, doing so without the proper experience can hurt your business and its value. It can also be very stressful dividing your time between selling and running your business. Sellers who have a business with real estate attached, or who are in a lease may also turn towards commercial real estate brokers to sell. While real estate brokers know how to advertise and get your business listing public exposure, that’s not necessarily a good thing, as you sacrifice confidentiality to do so. Business brokers, besides having the knowledge and experience to sell businesses profitably, add a few crucial benefits to the selling process, in addition to several others that make them the most qualified professionals to hire when you decide to sell.
When selling a business, how do you figure out the asking price? Determining how much you can sell your business for is a key component to getting enough interested buyers, while making sure are also getting the best return on your investment. If it’s listed too high, you won’t get enough interest, while if it’s too low, you may be short-changing yourself. Business brokers are professional business valuators who can give you a fair and accurate value of what a business is worth on the open market, based on a wide variety of metrics. They can use this valuation to help you list your business for the most accurate price and make sure you get the highest return on your investment. Brokers are aware of all of the potential value metrics, even those specific to your industry and can use this knowledge to help you to find value where others may not.
One of the best reasons to hire a business broker, rather than a commercial real estate broker or trying to sell a business by yourself is confidentiality. While it may seem like a great idea to let as many people as possible know about the sale of your business, it may backfire. If competitors know about a pending sale they can use that information to poach your customer base. If vendors or suppliers gain knowledge of a sale, they may get skittish and decide to alter their agreements with your company. Failing to list confidentially may create a situation where buyers are physically entering the business to ask the owner or employees about the sale. This can be annoying and distracting to the business, but it can also make employees uneasy about their job situation, causing them to look for work elsewhere.
A business broker lists businesses for sale anonymously, and has all interested buyers sign a Non-Disclosure Agreement and Buyer Qualification form. They ask all of the right questions and take all of the proper steps before providing information about the business to the buyer. This makes sure the buyers who do get information about the business are serious and financially qualified to make the purchase. While listing confidentially may seem like it limits the number of potential buyers a business will have, business brokers are experienced at blind marketing and have a database of qualified buyers who have already come to them looking for a business to purchase who could be potential matches for your business.
Preparing to sell a business is not something everyone is accustomed to doing. Most people would not even know where to start. Business brokers act as advisors, taking you through every step of the process. They can perform a financial analysis of your business and work with your bookkeeper or accountant to help you get your books in order. This is an important step in presenting your business to buyers. It can also help you to find ways to cut expenses and boost profits, therefore increasing the value of your business even further. Brokers are experts at finding ways to boost the value of your business, and demand a higher asking price. This is not only helpful for selling your business, but also raising profits and cash flow while you’re waiting for a buyer.
Another important role played by the business broker is to act as a barrier between the buyer and the seller. As a seller, this is helpful because the process of selling a business can be stressful and emotional. A broker effectively relays information between the two parties and helps the seller communicate their requirements to the buyer in a way that has a better chance of yielding a positive outcome. Brokers represent the seller during negotiations over the sale price and other potential deal terms. This is a valuable tool because business brokers are experienced negotiators who usually have good insight to what buyers are thinking and their negotiating tactics.
Having a business broker to act as a buffer between you and the buyer also helps you to focus on the day-to-day operations of your company. Allow the broker to handle all of the buyer inquiries, draft agreements, work with attorneys and accountants, provide documents requested by the buyer and deal with problems that come up during the sale process. This will help you prevent your business from suffering by dividing your attention, which is especially important if the business is taking longer to sell than originally expected.
A good business broker will work in your best interest to make sure your business gets sold and make sure you feel good about the process and the results. Brokers are paid by the seller, but only if the business sells, so they will be doing everything along the way to make sure that happens. They can even help close a deal by assisting the buyer with getting financing. A business broker is the most qualified person to sell your business and while their services do come at a cost, they are invaluable to the process of selling your company and hiring one could end up paying for itself as they help you to maximize your profit.
If you would like to find out what your business is worth and if it’s the right time to sell, consult with Corporate Investment Business Brokers. We can start you off with a free, no-obligation business valuation so you can decide if selling your company is right for you.