The independent spirit of many entrepreneurs is a key factor in their success. When you sell your business, however, a DIY approach is almost always a recipe for disaster. No matter whom you sell your company to, you likely have little experience selling a business. Going it alone almost inevitably means losing money and time. Here’s how a business broker can make the process easier and more profitable.
Getting a Higher Sale Price
You could save some money by selling your business without a broker, but it’s a decision that may cost you in the long-run. A broker can accurately value your business, then field offers from qualified buyers. This ultimately leads to a higher sale price.
Preparing to Sell
One of the key ways a broker adds value is by preparing you to sell. Clean books, efficient processes, and effective management all add up to more cash. Brokers know what buyers desire, and they know how to give it to them.
Expediting the Sale Process
When the sale process slows, it loses value. You’ll also spend more time away from running your business, costing you valuable time. Brokers speed the transaction along, preparing you for each step ahead of time so that you can get to closing as quickly as possible.
Anticipating Buyer Concerns
Every buyer has their own unique wish list. Brokers understand how buyers think, and they know what buyers are most likely to object to about your business. Anticipating these concerns ahead of time allows them to shape the narrative. You’ll work together to plan answers to tough questions, so that you can recruit multiple buyers and build a competitive bidding environment.
They Bring Expertise and Professionalism
If you’re like most owners, you’ve spent a lot of time selling products and services, but likely have never sold a business. So you can’t be an expert. The buyer, however, may bring an expert team to the negotiation table. Level the playing field with your own expert. Hiring a broker shows you’re serious about the transaction, and may even encourage the buyer to pay more.
They Negotiate More Favorable Terms
The terms of the deal, as much or even more than the price, can affect how much money you walk away with. A business broker represents your interests every step of the way. They can educate you about how deal terms may affect the total deal value, and alert you to common tricks that harm owners. As the face of negotiations, they can help deliver bad news without damaging your relationship with the buyer.
Brokers Are Objective
Your business is your baby, and it’s hard to be objective about your baby. A broker lends objectivity to the process, critically assessing your business and identifying shortcomings you might not have noticed. This can help you correct problems before they become catastrophes. It also ensures that you go into the sale with reasonable expectations.
A Broker Frees Your Time So You Can Focus on Your Business
When a business loses value during the M&A process, it’s a giant red flag. It’s also a common occurrence, since deal making takes time. By managing the sale for you, a broker frees your time so that you can focus on what you do best—making your business as successful as possible.