Business brokers play a vital role in the successful sale of a business. While it is possible to sell a business directly when you already have an interested buyer, a competent broker will make the process smoother and more professional. When you are selling a specialist business, or a quality business in a specific industry sector, you need access to the contacts they provide. It is here that a quality business brokerage really proves their worth, connecting sellers with screened, pre-qualified buyers and acting as professional intermediaries throughout the selling process.
Establish realistic market value
The first thing business brokers will do is to carry out an appraisal of your business and advise you on its realistic market value and a fair but profitable selling price. While many elements have to be taken in to consideration, the value will be founded on a review of tax returns and financial statements, with a cash flow analysis prepared by an accountant.
Your business brokers will advise you on a marketing campaign for your business and prepare a professional information pack. Depending on the brokers you choose they may already have a contact list of potential buyers from relevant industry sectors.
Before introducing you to potential buyers of your business, your brokers will pre-qualify them to make sure they meet the prerequisites. They will ensure that the potential buyer has sufficient liquidity of funds to be able to put down roughly 50% of the purchase price in escrow. They may also provide the buyer with the necessary documentation for a lender to approve a loan, if one is needed for the rest of the funds.
Facilitate contract negotiations
Business brokers play an invaluable role during contract negotiations between buyer and seller. Their legal teams provide professional advice and an objective perspective throughout the process, from the initial discussions to the drawing up and signing of the contract.
Where to find good business brokers
As with all professionals, you want to find a brokerage with a good reputation for dealing in quality businesses. Ask for recommendations from your trusted financial professionals such as accountants and lawyers. They are likely to have regular dealings with brokers in your local area and should be able to recommend one that will suit your business. There are business brokers that specialise in small businesses and others that deal only in top quality businesses with a certain profit level. Choose the best match for your business for optimal results.