Nobody has to tell you that these are pretty volatile economic times and if you’re contemplating buying or selling a business you are going to be facing some serious challenges. American business brokers have been doing a brisk business over the past two years thanks to a banking collapse and a stock market that no longer appears to be a prudent place to invest. Some businesses have to sell and others have cash that they can’t profitably invest elsewhere so they invest in growth. Business brokers are the professionals in the middle that make it happen for both the buyer and the seller. Here’s a short list of their services.
1. Preparing a business to sell
If you feel it’s time to sell your business a broker can help you put together the best look and then market your business professionally. When you’re selling you should be focusing on what you do best, running the business and making it as attractive as possible, and not be distracted with all the minutiae involved in selling a business. Leave that to the broker.
2. Valuation service
Arriving at a real market value for a business is obviously important to both a buyer and a seller and a professional broker can provide that service. In a sales transaction, the ultimate value of a business is what a buyer is willing to pay. However there are other times when an owner may want a certified value to satisfy estate planning, marital or partnership issues or when facing litigation. Once again the business broker is the pro you can turn to.
As hard and as complicated as it is to market and then negotiate a price, closing can be even more difficult because more people and organizations are involved. A business broker can handle much of the coordination that is required. He or she will have to deal with two sets of attorneys, accountants, possibly two or more banks, government agencies and vendors. This is a critical step and not the time to start learning by on the job training. Let a broker do it.
4. Exit strategy
The time to think about an exit strategy is before you put your business on the market. Discuss with your broker just what you want to do, retire or move on to another opportunity. This will actually have an impact on the method of payout. Many times you can get a more profitable deal if you agree to manage the business for a short time after the sale. There’s also the question of relationships with clients, vendors and employees. A broker can assist you in a strategy that leaves everybody feeling good.
5. Support services
Many brokers will work in partnership with support services such as legal and accounting. Some even work in conjunction with lending or funding sources as well. As a general rule, it is probably less expensive to contract directly with the services but if you don’t have a relationship with one or more already, then the broker is a good bet.
6. Up to date market intelligence
In a sense, business brokers work much like realtors, listing businesses and presenting the relevant facts. Brokers have the latest intelligence on a given industry in a given geographical area which can prove to be invaluable for either a buyer or a seller. And there are other market concerns that they stay current with as well. Perhaps one of the biggest changes for small businesses is in the area of financing a buy. With the banks as tight as they are, it is not uncommon for the seller to provide some or all of the financing.
7. Peace of mind
Buying or selling a business is a complex task and having a broker can assure the buyer or the seller that the transaction was fair, completed legally and save a considerable amount of time. Full time brokers make their living doing this, are professionals and render both the buyer and seller a real service of value.
The first step that a wise buyer or seller makes is to contact a professional business broker.