What is a Business Broker?
Business brokers are mergers & acquisitions experts who specialize in advising buyers and sellers through business sales transactions. When representing a seller, their job is to navigate the entire process for business owners, beginning with pre-sale analysis and ending with the successful closing of the transaction. They market the company to bring in more potential buyers by coming up with a detailed plan to make it look more attractive and increase its value.
To help increase the value of a given business, a broker will perform a pre-sale analysis, including a market valuation estimate. They will determine what your business is worth and how much you could potentially get from the sale of it. During this analysis, they look for hidden value and aspects of your company that they can highlight in their marketing plan. Other services a broker can provide would be to prepare you for the sale, perform financial projection modeling, confidentially list the business for sale and negotiate deal terms.
While it is possible for you to do all of these tasks on your own, brokers are experienced professionals whose full-time job is selling businesses. Using one will save you a lot of aggravation and money.
An important factor in getting the highest sale price possible is making sure the business is valued correctly. Business brokers perform market valuations to determine the appropriate listing price. While there are some common valuation factors among all businesses, every industry and location requires a slightly different approach. Each business also has its own unique aspects that must be considered in formulating an accurate price. Brokers are have the experience in valuing companies of all sizes and industries. They know how to leverage this valuation criteria in negotiations as well. Because most business owners do not know how to properly value their companies, they often sell for much less than they would have if they used a sell-side advisor.
Advisors Help Your Focus on Your Business
Why divide your time between running your business and trying to sell it? It does not make any sense to try to pull this off, especially without experience. Hiring a business broker allows you to keep your company running optimally. Having consistency with your business operations and earnings is what helps you to keep its value high and attract more buyers.
Using an experienced business broker will also help you to avoid common mistakes that plague DIY sellers. They can help you by keeping the identity of your business confidential. This prevents many potential problems, such as uneasiness among employees, customers, vendors and suppliers, as well as becoming vulnerable to competition. Brokers act as a buffer between you and potential buyers, so your time and business are not disrupted by having to respond to a barrage of questions and requests for information.
The fact is that DIY sellers fall victim to a lot of small, but costly errors. Some put all of their eggs in one basket, focusing on one buyer at a time. This can slow down the sale by neglecting other buyers or being unable to tend to them fast enough. When a buyer is interested in a business, momentum is very important. If you’re too busy to supply information quickly, they may lose interest and move on to something else.
Another common error is failing to properly plan for retirement, or whatever post-sale financial goal you might have. This includes not properly organizing your books, or neglecting the tax implications of the sale. A business broker can help you create and manage your exit plan as well as align your financial goals with the sale of your company.
The bottom line is that unless you have experience with selling businesses, and have someone who can assist you with running your company while you try to sell it, the do-it-yourself approach is not recommended. Most business owners will only have one opportunity to sell their company in their lifetimes. Why risk settling for a low price or making a mistake that costs you money? By hiring a business broker, you will be protecting your investment and your future.
Are you considering the sale of a business in Naples, Fort Myers, Sarasota or Tampa? Corporate Investment Business Brokers (CIBB) has been assisting Southwest Florida sellers in creating their exit plans, preparing their companies for sale and successfully closing their business deals for 35 years and counting. Use our experience and expertise to boost the value of your company and confidentially market it to a larger pool of potential buyers. Contact us to begin the process with a no cost, no obligation consultation.
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