Once business owners decide to sell their business, they often have to make an important decision about whether to hire a business broker to handle the sale or go it alone. The main reason some owners gravitate towards trying to sell the business themselves is to avoid paying brokerage fees. However, selling a business alone can present numerous potential roadblocks including failure to secure qualified buyers, difficulties with properly appraising the business and handling the paperwork involved, and lacking the time to commit to finding the best deal.
Having a professional and experienced business broker helps a business owner maximise the value of their business and avoid the stress or pressure that comes with engaging in complex business negotiations. Just like growing a business, selling a business requires a well thought out strategy. A good broker will have the relevant expertise to handle a business sale transaction and the capacity to handle all the aspects attributable to a successful sale.
The ‘for sale by owner’ strategy or ‘go it alone’ mentality when it comes to selling a business can be detrimental and for any business owner who has worked hard to build a company, getting the best buyer for the best price is undoubtedly top of the agenda and therefore a worthy investment. With so much at risk, one cannot afford to underestimate the importance of hiring the right professionals for the job.
1. Only a professional business broker can properly value your business
Many business owners do not have a realistic appraisal of value of their business. In some cases, they under value and in other cases over value their business. If not equipped with the know-how of how to apply appraisal methods appropriately, owners can make costly errors. Business brokers can help you get an objective fair market valuation that is best at the time of the sale. Experienced brokers will look at a range of factors in determining a value.
2 Experienced business brokers handle the sale so owners can focus on creating value
Selling a business can be a full-time job and the demands can add stress to an owner trying to juggle both the sale and the running of the business. Throughout the selling process, clever business owners keep their businesses fully operational and add touches that would bolster the potential for a best-in-market sale. A broker will help with preparing the sale, collation of relevant documentation, promoting and marketing the business, vetting buyers, and negotiating the terms. This frees up the seller to concentrate on other operational aspects that strengthen the selling proposal.
3. Brokers have a network of buyers they can directly advertise and market your business to
Getting the right kind of buyers interested in your business is what brokers are good at. They can drive up the selling price and maximise the value of your business by approaching potential buyers that you would not have access to. Because each business is unique, business brokers can qualify buyers quicker by using their data base of contacts looking to buy a business like yours. The right broker will also help you with a multi-faceted marketing plan which covers strategic marketing and advertising channels you would not have access to.
4. Secure a successful sale quicker, and for the best market price
You can save time and money by using an experienced broker who has experience and contacts to enable a swift and stress free sale. The advantage of using a broker instead of doing it yourself is that brokers can typically reach greater numbers of prospective buyers and handle the bidding process expertly to secure the best deal. Businesses put up for sale through brokers generally have a much higher listing-to-closing rate compared to those listed directly by business owners.
5. Business brokers maintain confidentiality and protect your reputation
It’s difficult to vet potential buyers without revealing your identity, if, as a business owner, you choose to deal directly with buyers. Acting as an intermediary between you and the buyer, brokers will ensure that crucial information is not leaked out to competitors, suppliers, employees, or customers prior to concluding the sale since this can impact the deal substantially and possibly the company’s competitive advantage, management structure, profitability and so much more.
When business owners make an attempt at selling their business on their own, there are many pitfalls that can cost them dearly. Most business owners can only deal with one buyer at a time but a business broker can expose a business to numerous potential buyers to increase the chances for multiple offers and the best price. Feel free to get in touch with us if you wish to know more about how you can navigate the sale process for your business.