Many people who own businesses think they can sell the business on their own. They do not see the value in hiring a business broker. There are many reasons why it is really in the best interest of the business owner to hire a business broker. Keep reading to learn more.
Knowing the Value
When selling a business, owners need to hire a business broker. Knowing the correct value of a business before selling is essential. Things to consider when evaluating value are business, business model, and financials. From a buyer’s perspective, the market price shouldn’t ever be higher than the actual value of the company is. It is never advantageous for a buyer to pay more for a company than it is worth. A good business broker will accurately value the current company as well as any future potential earnings. They will help negotiate a fair price and close the deal faster than if you were to do it alone.
Keeping it Confidential
Keeping a sale confidential is nearly impossible if you represent yourself. Having the word get out too early can be devastating to a company. Knowing the business is for sale worries employees, customers, and may ruin deals that are in process. A business broker will be able to broker a deal without revealing the identity of the business until you are ready to reveal it. They are bound from revealing any information by a confidentiality agreement.
Sorting Through the Potential Buyers
Many people are interested in buying companies, but not everyone truly has the financial means necessary. It can be an overwhelming task to sort through all of the offers and applications to find buyers who have the financial means, commitment, and experience to complete the deal. A business broker knows what questions to ask to evaluate potential buyers and find the ones that are serious potential buyers.
Marketing is Key
Just listing a company and advertising on a website is not enough. An experienced business broker will implement a plan based on the target audience. Brokers have customized marketing plans as well as databases of potential buyers, which makes selling a business much more likely. They can help highlight the strengths of the business, show potential buyers opportunities for growing the business, and reduce any weaknesses that may be keeping buyers from entering into a contract.
There are often additional fees associated with the sale of a business. A business broker can not always prevent these fees, but they can prepare you for them so you know when to pay them and how much to anticipate paying. Such fees might include an assignment fee for getting out of a lease early, prorating utilities for a month, or renewing liquor and food permits.
Taking Care of the Details
A business broker will take care of all of the small details and paperwork involved in the buying and selling of a business. They prepare the documents that will be signed during the sale and prospect good businesses. They should conduct thorough research to make sure that all of the business’s required licenses and regulatory documents are complete, accurate, and up to date.
Do yourself a favor. From knowing the value to taking care of the details, a business broker will get the best possible outcome.