Business brokers are agents who provide assistance to sellers and buyers of businesses in the important process of purchasing and selling. They are also known as intermediaries or transfer agents. When you engage brokers, they will estimate how valuable your business is, advertise it, interview potential buyers, conduct discussions with them, negotiate and also help conduct due diligence.
Why you need a business broker
Business brokers provide a wide range of valuable services. The following are reasons why you need one:
They can help you determine the most-probable selling-price valuation. Understanding how to value a business is essential as the methods used will significantly vary from one broker to another.
The broker will come up with a detailed Information Memorandum (IM) of your business. It is an important document that gives an outline of the company. Most potential buyers ask for the document that is usually 15- 30 pages long.
Any business that has been put up for sale needs as much exposure as it can get. A business broker can facilitate this by marketing it to potential buyers, for example, via facebook. Here’s a good example. https://www.facebook.com/verifiedbusinesses/
Some buyers may be willing to purchase your business, but lack the capacity to do so. Others may have the capacity, but may not have genuine interest in making a purchase. A broker can help by screening prospective buyers to determine their willingness and abilities.
They can assist by coordinating negotiations and offering invaluable advice regarding deal structuring.
Business brokers can provide general deal management to steer you through the whole process.
As the client, you would want everything about the transaction to remain confidential before, during and afterwards. The seller would undoubtedly want the same thing. A reputable broker can seal the deal while maintaining confidentiality.
Depending on your needs, the business broker can also provide consultancy services.
The whole process may last anywhere between 6 months and 12 months. The average period is 9 months. Brokers can help you remain focused on managing your business during the entire process.
If you are one of the owners of a Sunshine Coast business for sale, consider hiring a reputable business broker like Verified Businesses.
The relationship between you and a business broker
Upon signing a contract with you, the broker will make efforts to find a buyer for the highest price, and on terms that suit you best. The efforts are rewarded by earning a commission. To achieve this objective, the business intermediary may do one or more of the following:
Withhold payment in escrow until the deal is closed. Closing entails meeting between the two parties, transfer of business ownership and conveyance of business name.
Ensure confidentiality. Nearly all brokers have established systems which safeguard confidentiality of sellers, buyers and details of transactions.
Negotiate the transfer or assignment of leases, help buyers to obtain finances and even negotiate with creditors.
Appraise your business. What is the value of your business? Well, you may not be sure. Business valuation is not as simple as many people think. Business brokers can conduct a valuation exercise on your business and establish the maximum amount of money that you can earn from its sale.
Negotiate for the best price on your behalf. Given that they have no emotional attachment to your enterprise, they can effectively and efficiently carry out negotiations. If you fail to involve a broker, the whole process can take a year or even longer, and you may still get shortchanged.
Business owners who are looking at buying or selling should definitely consider engaging business brokers to ensure they get the best outcome within the shortest possible time.