Every month, more than half a million people become business owners. For many, the primary goal is to grow and sell their business. You can make a significant profit by growing and, eventually, selling your business, but the transaction itself demands significant work which almost every owner will underestimate. Finding the right buyer is a job unto itself. As the price tag rises, so too does the complexity involved in the transaction. For this reason, many owners seek the counsel of a business broker. A broker supports the sale by valuing the business, finding buyers, acting as an intermediary, and seeing the transaction through to completion. Here’s what you need to know before you hire a business broker to help you sell your business.
To broker or not?
Brokers typically take commissions of 10-15% of the sale value, so an expert can eat into the profits of the sale. A broker won’t necessarily expedite the transaction, either. You can generally expect a sale to take 6-12 months. A good broker, however, eliminates the daily challenges of selling a business, freeing you to focus on daily operations. They screen out unserious buyers, craft compelling narratives to market your business, and inspire buyers to pay a fair price. They also keep emotions out of the transaction by acting as an intermediary and helping with the negotiation process. So how do you find the right broker? Follow these steps:
Be selective with your broker choice
Most consumers read reviews before making a major purchase. You should be just as diligent when hiring a broker. Treat the process as an interview for a job. Ask for references, ask lots of questions, and be skeptical of any unsupported claims. Critical to the process is asking for specific details about how the broker intends to make your business stand out.
Get clear details about the marketing plan
Anyone can slap a business on a company-for-sale website. A broker whose sole marketing strategy involves these sites is unlikely to garner much success. Ask the broker for specific details about their marketing plan. Look for someone who intends to use multiple channels, including both inbound and outbound marketing. The best brokers will already have access to potentially interested buyers—former clients, colleagues, and other companies they’ve previously worked with. The focus should be on devising a marketing plan specific to your business. This is because value is always in the eye of the beholder, and a buyer who sees what’s unique about your business is more likely to put in a good offer.
Like anything else, networking often offers the best results. So start asking people you trust for recommendations. Ask about brokers with whom they’ve previously worked. High-quality brokers will have made an impression on attorneys, CPAs, and other business professionals. So don’t shy away from asking the business people you trust most. If a friend or colleague has recently sold a business and had a good experience, ask which broker they used. Success should guide your decision-making process, and good brokers leave a trail of success in their wake.
About Sunbelt Atlanta
At Sunbelt Atlanta our team is made up of seasoned professionals with more than 60 years collective experience selling companies. Our backgrounds and industry experience are as varied as the companies we represent. Some come from main-street, some from wall-street. Collectively, we have closed more than 500 transactions and the companies we have sold range in size from $50,000 to $25,000,000 in transaction value and span all industries. One thing our professionals have in common is that they all have first-hand experience initiating, negotiating and managing the deal process. We can bring a main-street tenacity to a middle market transaction and middle-market finesse to a main-street transaction.