As a business owner, you may have come to the point where all you can think about is, “How do I sell my business?”
At this point, the smartest way to go if you want to sell your business quickly and at a good price is to hire a business broker. But not just any broker – you need to hire the broker best fit for the job.
A skilled business broker will fully assist you throughout the process of the sale. The only thing that should be required of you is to provide some documentation to the broker.
Consequently, this will free up huge amounts of time for you to continue to run a successful business.
However, this does present the problem of identifying a great business broker in the first place. Where can you find one?
Thankfully, this article will provide you with details regarding what to look out for when trying to hire a business broker. We will also provide you with an in-depth review of how a good broker works to ensure a successful sale and where you can find one.
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Finding a Broker to Sell My Business
Finding the best broker to sell your business can actually be a fairly easy undertaking if you know exactly what to look out for. This will help you to sift through the multitude of brokers out there in order to end up with the best one.
Here are some traits of a skilled business broker:
There isn’t any college someone can attend to graduate as a business broker. That’s why being a good business broker is mainly about having experience in doing the job. The first thing to consider when trying to hire a business broker is to find out how much experience they and their team have in selling businesses. There is a saying in the business brokerage world: “Every deal gets killed three times before it can get to the end.” An experienced business broker knows how to bring the deal back to life every time it gets to the point of being killed! The more deals they have successfully closed, the better they’ll be able to guide your deal to the end as well.
#2. Being up-to-date in marketing
While being experienced in selling businesses is really important, being up-to-date in marketing methods plays an important role as well. At the end of the day, brokers need to get the attention of potential buyers for your business. If a broker can’t put the vast majority of marketing platforms available these days to good use, your business will receive fewer offers, and so the resulting sales price will also be lower. That’s why when you consider a broker, you need to make sure they are marketing themselves using state-of-the-art channels. If a broker doesn’t have a great website, social media presence and generally good online presence themselves, you may need to reconsider their ability to market your business as well.
A broker who promises to singlehandedly take your business from the point of listing to closing is not to be trusted.
The right broker for you is someone who has established relationships with lawyers, accountants, and other professionals. Good brokers are not afraid to call on this professional network for assistance when they need it.
Furthermore, when a broker has a network of connections, it indicates that they have been in the business for quite some time.
Pricing is one of the major issues that stands as a barrier to successfully selling a company. But for some reason, many brokers find it difficult to be sincere regarding the value of their client’s company.
Instead, they say what they feel the clients want to hear, consequently causing a delay in the sale due to the company being inaccurately valued. A great broker will be upfront after assessing the value of your company, even though you may dislike the news.
#5. Great website and brochure
When interviewing a business broker, you should ask for their website and brochure. Their website should be well written, organized, attractive, and easy to navigate.
Furthermore, the brochure should tell you everything you need to know about the broker and the organization they belong to.
A decent website and a professional brochure will help you understand how invested the broker is in their business. This will also help you determine if they have what it takes to attract buyers for your business.
Before hiring a broker, it is important that you ask for their membership in any associations and check for their state license that allows them to market companies.
If a broker is a member of a local or national association, it shows that they are committed to their business because maintaining membership in such associations requires an investment of time and money.
Also, being a member of an association enables the broker to have wider connections, which can help to facilitate quicker sales of businesses.
The Roles of a Broker
There are some key roles that a broker plays immediately after you hire them. These roles facilitate the quick procurement of buyers and are vital to ensure the successful sale of your business at top dollar.
Here are the duties of a business broker:
The broker starts by planning for the sale of your company. This begins right from the moment you hire them. This stage is important in order to add value to your business. It involves putting your profit and loss account statement and all other financial documents in order.
They do this by helping your business to cut down costs and increase profit. For instance, an annual profit increase of $5,000 can help boost the selling price by $20,000.
Furthermore, this stage has to do with preparing your business for handover. Here, the broker will advise you on how best to train your workers so that the transition will be smooth and easy.
#2. Assessing value
This is the next line of action. A great broker will assess your business to determine the value. Deriving the actual value of your business will help the broker to avoid setting the selling price too high or too low.
Deciding on the appropriate price for your business to go on the market with is crucial. A very high price can scare away potential buyers, as they tend to think they would be dealing with an irrational buyer. A very low price, on the other hand, can cause you to leave money on the table. An experienced broker will avoid these pitfalls and help you get the most out of your business.
#3. Proper documentation
The broker at this stage will help you to gather every necessary document in order to give a full picture of your organization. They will then compile everything into the information memorandum (IM) and confidential business review (CBR) or confidential business summary (CBS) based on the type and complexity of your business. This document will play an essential role in discussions with buyers.
An IM is a comprehensive document that gives a clear overview of your business. The IM of your business must be accurate and should be in line with legal requirements.
#4. Identifying buyers
Identifying buyers might be very difficult if you’re trying to sell your business on your own. But with professional business brokers like Zoom Business Brokers, locating potential buyers is not a problem.
This is because a great broker will have access to a large database that they have acquired over their years of practice. This database allows them to personally contact individuals who could be interested.
Marketing a business takes skill and a high level of experience. At Zoom Business Brokers, decades of experience have placed us ahead of the curve. Our professionals are skilled in creating effective marketing campaigns.
This includes the use of ads, brochures, social media, and other channels of communication. We carefully plan and execute our campaigns to attract buyers without revealing the identity of your company. Beyond that, as experienced business brokers, we know exactly which marketing channels are the best to use for your specific type of business.
#6. Finding real buyers
While every inquiry regarding the sale of a business may be from a potential buyer, screening every single buyer can be time-consuming.
That is why Zoom Business Brokers have come up with a strategy to check the buying capacity of a buyer before entertaining further inquiries. Our brokers know how to separate tire-kickers from real buyers and don’t disseminate your confidential business information other than precisely what is needed in order to protect your business from risk.
#7. Creating a purchase agreement
After a potential buyer has reviewed the information memorandum, they will likely want more information.
Here, the broker will liaise with the business owner or their team to negotiate a conditional purchase agreement. This will be done without the broker disclosing sensitive details.
#8. Disclosure and due diligence
Signing a purchase agreement doesn’t automatically mean that the business has been sold. Many buyers often want to use the opportunity for full disclosure to review information initially withheld from them due to its commercial sensitivity.
This due diligence process usually takes 5 to 15 working days, or up to 90 days or more for complex businesses.
#9. Conditions removal and closing
After both parties have met the conditions for the sale and purchase of the business, the conditions removal will be signed.
Subsequently, you will need to open an escrow. The escrow will be a neutral party that will stand between the buyer and seller to handle the transfer of money and necessary documents.
Contact Zoom Business Brokers
There are several channels through which you can find business brokers, whether through a referral, online, or via a brokers association.
Whichever channel you go through, you should still carry out your research. This will ensure that you hire the best broker for the job.
At Zoom Business Brokers, we have a team of professionals who have gathered vast amounts of experience through the successful sales of businesses. Our professionals have what it takes to help you sell your business without stress.
But you don’t need to take our word for it; you can carry out your own investigations to discover that we offer nothing but the best. Contact us today and let us help you to make the most out of selling your business.