(Hint: There’s no Upfront Cost, it Saves Time & You Get a Higher Quality Buyer)
If you have concluded that exiting your business is the best option, it’s time to craft a comprehensive exit strategy. After the blood, sweat, and tears, the decision to sell your business is not an easy one. For this reason, you should design an exit plan. A solid exit plan guarantees a smooth business sale while also getting the best value for your investment.
How do you Sell?
For successful entrepreneurs, there’s an emotional attachment with their companies that grows over time. When it comes to the exit, these business owners feel entitled to control the process. It might look like a smart decision but selling your company is a long-drawn process that requires special skills. It is not as easy as putting up a sale sign or advertising the company on social media.
The most important decision you can make is to work with a business broker. This is an intermediary between the business/owner and the seller. With so many entities going up for sale, these brokerage services are on the rise.
Entrepreneurs can now leverage business brokerage services for business valuation, marketing, preparing documents, legal processes, and other exit processes. It is an event that can take years and for this reason, you need someone with expertise by your side.
But why should you hire a business broker when you know everything about the enterprise? To answer this question, you have to consider how business brokers work and some specific services they offer.
What a Business Broker Does
A business broker facilitates the sale of a business. They act as intermediaries between you and the buyer for a commission. The broker takes time to review your business and understand everything about it. The idea is to understand the vision and objectives of the investor and consider these in the exit strategy.
Your broker works with you for months or years to prepare the company sale. They identify key value drivers and work on these to make your business more attractive to buyers. From the moment you hire a business broker, they will work in the background to help you streamline operations and meet the highest industry standards. Their input makes the business more appealing to buyers.
Your broker does more than put up a business for sale signs. They understand the market and work hard to get you the best deal. The business transfer agent gives you an objective business valuation using different valuation methods at their disposal. They also pinpoint your company’s value proposition, assist with negotiations and prepare business paperwork.
Why use a Business Broker?
The decision to use a business broker or not can make or break your business sale. It requires a lot of thought and due diligence to determine is these agents add any value to the exit process. Here are some reasons that should convince you of the importance of using a business broker.
1. No Upfront Cost
If you want to sell your company, getting the highest value is at the top of your mind. In some cases, the entrepreneur has constrained cash flow and they don’t want to take up any more unnecessary costs or risk.
When hiring a business broker, you have nothing to lose. An established business transfer agent works on commission without any upfront fees. Their contract agreement is to sell your company and receive payment from the sale. A trustworthy broker will not ask for an upfront fee and this should be one of the things to look out for.
Without any upfront cost, there’s no reason not to use this business transfer agent. They have the expertise required to prepare your business and present it to the buyer. You will benefit from their input in prepping the company at no cost.
From the business valuation, business plan exit strategy, identifying and boosting key drivers to the negotiations, you have an experienced representative working for you at no initial fees. Without an upfront fee, you harness the business selling expertise of your broker to deal with different buyers.
The average time to sell a business is from six to nine months. However, selling your company might take even more depending on your preparedness, the industry or market situation. When working on the business sale alone, you have to put in many hours, and this can drain your energy.
You still have to work on the core business and ensure it runs smoothly to attract buyers. With time, your focus will shift towards the sale and this can affect the performance of the company. You need more and more time as they exit plan unfolds.
From consultations, marketing, negotiations, preparation of documents, tracking metrics, and data reporting, selling your own business is an arduous task. Working with a business broker can save you a lot of time. These professionals know how to speed up the company process.
Business transfer agents have the tools and resources required for the business valuation, tracking metrics and reporting, among other crucial tasks. Your broker also knows how to streamline operations and make the entity more appealing to the buyer. This reduces the sale time and saves you the agony of waiting for years before closing a deal.
3. Get a Higher quality buyer
A business broker only deals with qualified buyers. These are the buyers from their contact list who already meet certain criteria. Many business owners waste time haggling with everyone who contacts them for inquiries.
A broker, on the other hand, creates a shortlist of buyers based on their financial capacity, experience in investments, and industry background. They identify higher quality buyers with approved finances to improve the quality of negotiations. If a buyer is serious about putting an offer on the table, that’s when the broker brings you to the picture. You don’t have to waste time scouring through hundreds of time-wasting inquiries that are energy draining.
Creating a Custom Exit Plan
For the best experience when selling your business, we help you create a custom exit strategy that suits your plans. Whether you want to go on to retire or the business has drained you, we take a lot of time to understand your needs to guarantee a smooth exit and the most value from the investment.