Are you someone who is looking for new business opportunities? Or are you looking into retiring? Even if you need the money from your business or simply don’t wish to continue on the path you or your company is on, there are countless reasons for selling a business. Making this large of a decision is usually tough, but can always be justifiable.
If you do decide to walk away from your business, you’ll want to do it as quickly as possible, with the most amount of money in mind. Of course, this can be done alone but requires an extensive amount of research. Many large businesses agree that sometimes it’s best to hire outside help because getting a professional opinion is usually the best option.
There are plenty of advantages to hiring a professional business broker, and here are a few of the most notable benefits.
The Advantages of Seeking the Help of a Business Broker
If you have ever compared professionally made furniture to that of something you have made, the difference is most likely visible. The same goes for looking at mature photos to that of a professional. There is a difference. No matter how amazing the chairs you made are, or the photos taken look, there will always be a bit of a difference. The same goes for selling your business.
Business brokers are trained and knowledgeable in presenting your business to any sort of buyer in the best manner possible. They are experts and know the advantages and disadvantages of the selling game, but are well equipped to deal with it. Even if these business brokers are selling an unexpectedly high-profit business, there can still be downsides that come up. Let the brokers worry about it, and present your business in the right package.
Negotiations Will be Simplified
If you are someone who has great negotiating skills, then a business broker can only elevate it. Sure these negotiating skills might only be based on the business you know and love, they are still skills. But, there is much more that goes into selling your business besides knowing the ins and outs of your company. This is where a business broker will come in.
These brokers know all there is to know about the selling process and how to facilitate all types of negotiations. Each conversation that a business broker has, can be turned positive simply because they know exactly what they are doing. Most importantly, business brokers know exactly how far buyers are willing to go before closing sales, which might even result in a higher sale price for your company.
CIM’s and High-Quality Teasers
For those that are unsure, a business teaser is a special document that gets sent out to potential buyers urging them to stay updated for potential sales in the future. This document is usually prepared by the bank representing your company and alerts potential buyers that an investment opportunity might be arising soon. Sending a teaser out is considered to be one of the most important parts of your sales process. This one or two-page summary will highlight all the benefits of the company being sold and will allow potential buyers to decide their interest in the investment opportunity.
If a buyer is interested, they will sign a non-disclosure agreement, or an NDA, in order to get more access to the details involving your company. Additionally, by signing an NDA, these potential buyers will be likely to receive a CIM, which is a confidential information memorandum. It’s imperative that both these documents are written up by a professional because the wording must be perfect. Business brokers always have their own standards when drafting these documents up, and know exactly what is supposed to be said and what is supposed to go in them. If you do wish to make these on your own, it may take a long time, and might not secure a deal.
Much Less Paperwork and Hassle
When you are looking to sell a business, or manage to get an interested buyer, tons of paperwork is involved. From non-disclosure agreements to CIM’s and purchase agreements, one would have to study and look into countless templates in order to figure out which was best for your business. After that first step, there is plenty more paperwork to follow.
Most business brokers have years of experience with drafting agreements and moving past any roadblocks that come up. Asking for a professional’s help will give you and your company an expert opinion, and eliminate the heavy lifting on your part. While you are busy getting all the information needed, such as financial information and legal business documents, your broker will deal with everything else.
Special Buyer Screenings
If your business is lucky enough, there will be a few investors interested in buying your business. With that in mind, it’s imperative to only focus on the buyers that are seriously interested. Having to deal with countless buyers who are simply looking for those with a budget that doesn’t match your asking price, is incredibly overwhelming and a waste of your company’s precious time.
The job of a business broker is to screen each potential buyer, and figure out how likely they are to actually make a purchase.
A Healthy, but Professional Relationship Between Buyers and the Company for Sale
When selling anything, the buyer and the sellers must have a good relationship before moving forward. These two parties will be working closely until the sale is finished. You will need to speak with the buyer about your business, give tours, connect the buyer with the suppliers and talk to your employees. Completing all these tasks and more is stressful at times, but a broker can eliminate some of these tasks.
A business broker will take on some of the duties needed to sell your business because they are an expert. Their job is to maintain a professional relationship between the buyer and the seller without forcing the sale.
Completing Market Studies
When selling anything, let alone your business, you need to be familiar with the selling market. In order to set the right price, one must know what to look at and what the going rates are. Brokers have countless years of experience selling businesses on a local market and will know what sells and what doesn’t. Putting the right price tag on your business will make or break a sale.
Spending days, or even weeks, doing market research on your own is incredibly time-consuming and even then, setting the right price is difficult. A broker will know the exact market you are looking in, the perfect price, and the amount of time it will take to close the sale.
If you are looking to sell your business, what’s the first place you would look? If you don’t know the answer immediately, then you need to hire a broker. Selling a business is much more than just making a simple posting online. Business brokers have access to a vast range of databases that will allow your business to sell. They will have many sites that are solely for selling businesses and will choose the correct ones to list your business on. This way, the ones that are most likely to purchase your business are targeted quickly and easily.
Loads of Saved Time
You and your company’s time is the most important thing when selling, so why waste it? Hiring a broker will save you plenty of time because selling your business in the wrong way can be incredibly time-consuming. Point blank, selling your business on your own is a process that will require your attention 24/7. Are you ready to devote all this time to learning the ins and outs of the market, listing your business and the right place, and speaking to buyers?
If you’re not ready for that full commitment, then hiring a lawyer is the next best step. A broker will take care of a majority of the things needed to successfully sell your company.
Disadvantages of Hiring a Business Broker to Sell Your Business
With all the positives that come with hiring a business broker, there are a few downsides. These downsides should be taken with a grain of salt, but are worth being considered when making a decision when it comes to selling your business.
High Hiring Fees
Yes, of course, a business must pay the broker to help sell their business. Because a business broker is so imperative and does the majority of the work, fees are quite high. The average fee that a broker will charge falls around 8% to 10% of the total selling price. Yes, it’s possible to sell your business on your own, saving you thousands of dollars. But, keep in mind the process is taxing and might leave you with a bad sale. Bear in mind that Acquiry doesn’t charge you as the seller anything to sell. We negotiate a remuneration deal with the investor.
Sometimes the Perfect Broker is Hard to Find
As with any specialist, a great broker for your business’s sale is hard to find. Your company might spend weeks looking for the perfect one that will aid the sale of your business, and it might leave you to settle with less than ideal services. Settling for a decent broker instead of the one your business needs could potentially hurt your sale. The process might be unpleasant as well.
Make sure the broker you choose wants the best for your business and doesn’t simply try and make an average sale as quickly as possible. The faster the process doesn’t always mean the better the sale.
Not Enough Experience in the Field
If your business is in a specialized industry, the broker you choose needs to have experience selling businesses in that area. A broker that doesn’t have the correct experience will hinder your sale and the price you are asking. Selling a business is easier and more successful by having the correct information, so a broker must be able to do that.
On rare occasions, the buyer you choose might be working with a few direct sellers. If this is the case, your broker might try and persuade you to go with a certain buyer, lowering your standards for the purchase. If this is the case, they are acting in their best interests and not doing what’s best for your company.
Make sure the broker you choose is doing their job, which is to sell your business to the best of their abilities, focusing on what you are striving for. When you hire a broker you are counting on them to know what they are talking about and counting on them to act in your best interest. If there are any red flags during their time working with you on a sale, it’s best to end the contract and keep looking for a better broker. Inaccurate information on the market, choosing the wrong buyers, and not listening to what the company wants out of a sale can truly affect the sale of a company.
Hiring a Business Broker is Worth It, as long as it’s a Perfect Fit
At the end of the day, it’s up to you and your company if you want to hire a business broker. If you’re looking to save time, effort, and nerves when selling your business, then hiring a broker would make the most amount of sense. However, this is only needed if you find the perfect broker for your company.
If you can’t find a good broker, keep looking, and start the selling process on your own.