Why use a business broker ?
After years of building your business the time might be right to sell. But how do you do that? Should you try to market it yourself, add it to a listings website or use a business broker?
Selling yourself could mean you fail to achieve the full valuation of your company. And, as around 80 to 90 per cent of a business owners’ net worth is tied up in the business – according to Forbes, it’s in your best interests to achieve the best possible price.
And then there’s the time it takes: on average between 7-12 months. Beyond the stresses of achieving a sale, you also need to ensure you meet the legal responsibilities required when selling.
Being tied up in the sale of your business could mean you end up spending more time on that than running your company. This can also create issues if you fail to keep an eye on day to day activities.
With all this in mind, you might already be thinking that a business broker could be useful to you.
But what exactly are business brokers?
A business broker helps sell businesses by gathering your financial information and documents and helping you understand the value of your business.
Brokers market your business to find a buyer and negotiate the best deal for you. They also manage due diligence and handle any issues that arise during the sale.
You can find out more about our selling process here.
5 reasons to use a business broker
Here are five reasons why appointing a good broker will help you get the best deal when selling your business.
1) Sound professional advice from someone that has done it before
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 at all steps in the process from a professional who has hands-on experience of transacting many deals.
Business brokers have experience in the buying and selling process, which means they can help you navigate the process more effectively. They can advise you on valuation, negotiate on your behalf, and ensure that the transaction is legally sound.
2) Find the right buyers
The value of a business is what a buyer is willing to pay. Looking under every stone and finding the right buyer willing to pay the right price is vital for a successful deal, and it can be a lengthy process. Good brokers have long lists of suitable buyers they have qualified to understand what they are looking for and the level of funds available.
As you can imagine, these lists take years to build. Good brokers also research your market place and find strategic buyers – buyers for whom your business will represent strategic value.
3) Confidential marketing
Consider what would happen if your staff found out ‘on the grapevine’ that you are looking to sell the business? What if key suppliers or even clients found out?
Putting the word out yourself that you are looking to sell could seriously reduce the value of your business. Anonymity is essential when marketing a business for sale. A good broker will ensure this is maintained, and that the appropriate information is released to serious buyers at the appropriate moment.
4) Negotiate the best price
Once a serious potential buyer makes their interest known, it’s time to negotiate price. But how do you do that if you’ve never sold a business before?
Do you have reasonable expectations? Has the buyer put all his cards on the table? You will perhaps never know the real answer to this – but if you have a valuation from an experienced broker and several offers on the table, it will be easier to negotiate a deal you’re comfortable with.
5) Achieve a successful sale
Good brokers typically achieve a 70-80 percent success rate. Whereas listing agencies or businesses advertised privately only achieve 20 per cent success in achieving a sale. That’s a huge difference and it speaks to the expertise and value you receive from using a proper business broker to sell your business.
Finally, using a business broker means you can concentrate on your business. Let the broker find the buyers, set the valuation, negotiate on your behalf and keep the deal on track while you continue to run your business effectively.
If you’re ready to sell and want to speak to an experienced business broker, contact our team using the form below.
