Why Do I Need a Broker to Sell My Business?
All good things come to an end, and this maxim applies to entrepreneurship as well. Business owners have a diverse number of reasons for wishing to exit. From retirement, a once-in-a-lifetime offer, mounting risks to burnout, it comes a time when selling your business is the best option.
Whatever the motivation behind the business sale, it’s important to get the most value. There are no do-overs once you close the deal.
Now that businesses always come up for sale, an industry of professional business sellers has evolved over the years. These brokers have an intense understanding of the exit process from the business valuation, value drivers, marketing, transactions, documentation, legal procedures, and much more.
After putting in so much into the enterprise, it’s tempting to do everything on your own during the exit event. Many business owners seek to control every aspect of the exit and inevitably mess things up. You have to appreciate that selling a business requires a sustained effort. It is an undertaking that can take months or years. Is this a task you want to take head-on alone?
What Do Brokers Do in a Business Sale?
At this point, you should evaluate what a broker brings to the process. These professionals work mostly on commissions to prepare an in-depth analysis of the business. They also make a detailed marketing strategy and a comprehensive business valuation and exit strategy business plan.
The intermediary consults with you and potential buyers to facilitates the sale. Through their experience, they can guarantee a faster sale and better value from the deal. A good broker works with you over a long period to prepare an exit plan that suits your goals.
Reasons to Use a Broker in a Company Sale
Here are some other reasons to work with a professional business seller in your exit plan.
1. Professional Business Valuation
After working hard to build an enterprise, most entrepreneurs feel they have the expertise required to value the investment. However, such a valuation is from the seller’s point of view and doesn’t count for much. A professional business valuation considers how much the business on sale is worth to the buyer.
A broker has access to methods, tools, and databases that will give the best valuation to come up with an asking price. Some of the methods used in the assessment include market cap, discounted cash flow (DCF) Method, liquidation value, earnings multipliers, and book value.
2. Effective Pricing
After a valuation of your company, there’s a lot of work that goes into setting an asking price. the valuation also considers future earnings prospects, similar company comparisons, among others. With a realistic valuation supported by structured formula, it’s easier to sell your business.
An experienced business broker understands the developments and trends in the market. They know what other similar businesses are on sale or have sold recently. Such considerations help come with effective pricing to help close the deal faster. Effective pricing also guaranteeing the best value for your investment.
3. Business Marketing
If you take your company to market, you have to learn how to everything from the start. While you have successfully built this venture, the task at hand is entirely different. It requires a different set of skills and networks.
Your business broker already knows the tools and platforms to use to target potential buyers. These professionals already have networks they can activate to get the right buyers. When you give the job to a broker, you know they will work extra hard to find the best deal.
Selling a company is different from marketing goods and products. You don’t want to advertise about a business sale because this might create a wrong impression among your customers. The last thing you want is your customers to turn away because they think your business is going down.
Working with a broker creates a buffer between your company and the buyers. There’s always non-disclosure or NDA in these transactions, and the broker enforces the terms. If a buyer only wants general information, your broker sorts them out without revealing details of your business.
5. Hassle-free Business Sale
Many entrepreneurs take it upon themselves to sell their companies without appreciating how involving this process gets. With time, you start losing focus on the core business, which in turn affects the sale. The last thing a buyer wants is to buy a non-performing entity.
A broker can save you a lot of time and stress by managing this sale. Taking on this sale alone can bring your life to a halt due to the time and energy it demands.
6. Structured Exit Plan
If you approach a business sale haphazardly, you might end up getting less than what you deserve from your investment. It is a problem that many business owners encounter because they don’t leverage professional expertise when exiting.
A structured exit plan not only helps with the valuation but also pinpoints value drivers you need to work on. From the systems and procedures, employees, financial data and reporting, prospects, diverse customer base to growth potential, your broker will help make your business more attractive to buyers.
7. Finding the Right Buyer
A broker has the right connections to find the right buyer. With their experience in selling companies, they have collected valuable contacts they can approach for the best deals. If you decide to advertise your company, you have to deal with everyone who sees the advert. It is one reason many small business owners struggle to sell otherwise performing businesses.
Working with a Business Broker
Selling a business is one of the toughest decisions you can make. We understand it has taken sacrifice to get the business where itis. Our mission is to help our clients through this tough process by developing a structured custom exit plan.
We work with you from the moment you contact us to the point of closing the deal. Our team takes time to learn and understand your company, and this helps us work productively with you. From the business valuation to the exit stage, we represent you to guarantee you get the best value for your investment.
Contact us today for a custom exit strategy in your business sale.