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When it comes to the sale of your business, you might wonder whether you should use the services of a business broker or try and sell on your own…
Although the latter might sound tempting, this approach can cost you far more than just your time. It can cost revenue, employees, confidentiality and ultimately the final value of your business transaction.
Here are ten reasons you should consider using the services of a business broker to sell your business:
Experience
Business brokers are experts in helping business owners successfully sell their businesses. Selling your business is for most a once in a lifetime experience, so you cannot afford to learn how to sell a business whilst on the job. You will need sound advice and support at each step of the process from a professional who has hands-on experience of transacting many deals. Furthermore, many business brokers have themselves one time or another, run and sold their own business. Therefore, they understand the emotions you are going through.
Qualified Buyers
Business Brokers ensure that all buyers are ‘qualified buyers’ at the primary stage of the sales process. They will spend time screening prospective buyers in several ways to ensure that the buyer is ready to purchase your business. A business broker will obtain documents such as credit reports and financial statements, as well as interview buyers regarding credentials and experience. This screening process removes the time wasters and ensures you only speak to serious buyers.
Negotiation Expertise
Business brokers are skilled negotiators who are driven to maximise your sale price. Instead of haggling back and forth you can have a business broker be your intermediary to support you and represent the best price you are looking for. Ultimately a business broker should take the stress and personal element out of the equation during deal negotiations.
Confidentiality
A business broker will keep all details of your sale completely confidential. This is essential if you do not want your competitors, employees or customers to knowing that you are selling your business. A business broker will make sure that all prospective buyers sign a non-disclosure agreement (NDA) and then be ‘qualified’ as a serious buyer before sharing any information about your business. This ensures that you are in control.
Professional Marketing
Business brokers know exactly where to advertise your business to maximise interest and how to market your business, so it gets noticed by strategic buyers. They will undertake a multi-pronged marketing approach which will give you a vastly greater reach and more targeted exposure than going it alone. A business broker will also have an active database of interested buyers that are pre-qualified and looking to buy a business just like yours.
Business Valuation & Appraisals
An experienced business broker will be confident about valuing your business. Business brokers possess the knowledge, skills and information related to your business, industry and location. They understand the market, have access to statistics on recent sales and can apply various methodologies to accurately appraise your business. Mostly importantly, a business broker will guarantee your business is neither over-priced nor undervalued.
Save Time
A business broker will have all the systems and processes in place to manage the sale on your behalf thereby leaving you to get on with what you do best – running your business. Selling a business is a hugely time-consuming process, if you are tempted to go it alone remember any dip in revenue could make your business less attractive to prospective buyers. Which is why it makes sense for a business broker to focus on marketing the business, leaving the seller to ensure it is an attractive prospect on the market.
Reduce Risk
Business brokers are trained in the legal legislation and documentation necessary to protect and guard you from delays and problems during your business sale. Their past dealings and experience at qualifying buyers significantly reduces the chances of your business deal falling through at the last minute. Furthermore, a business broker will provide guidance and valuable experience with regard to seller financing issues when necessary.
Strategy
Business brokers are adept at handling the whole sales process from start to finish, as they have done this many times before. They will devise a clear and comprehensive strategy, handling legal processes, buyer enquiries, accountants and developing confidential sale memorandums. A more systemised and honed strategy will give you a more streamlined and effective sales process. By utilising a business broker to help develop and execute your strategy, you are far more likely to achieve your desired outcome.
Success rate
A business broker will achieve a 70-80% business sale success rate. Whereas listing agencies or businesses advertised privately typically achieve a 20% success in achieving a sale. This is not surprising considering business brokers are experts in selling businesses and offer a complete and comprehensive service from the very start of planning, right through to sale completion and possibly beyond.