Thinking of selling your business? Then you need to know about a special group of people known as business brokers. What do they do? Well, they help facilitate the sale of your business by fulfilling a number of roles and making sure that everything happens on time.
This frees you up to continue to run your business efficiently. The buying and selling process often takes longer than you think it will, and you still have a lot to manage in the meantime. Think of the business broker as your quarterback, calling plays and making sure the team works well together.
Here are some of the many ways a business broker works for you when you are selling your business.
What’s it Worth to You?
One of the biggest roles a business broker plays in the selling processes is helping you determine the value of your business. Sometimes the business broker is also a business and equipment appraiser and does that portion of the work for you. In others, you will work with an outside business appraiser, and the business broker coordinates their efforts with other pros.
If you are selling a business that also has real estate that goes with it, this will be a two-part process. The real estate will have to be appraised before the business appraisal can be completed so that the business appraiser knows how to include that value.
While you as a business owner might have an idea of what your business is worth, a business broker can help you put a number on it and let you know what the market will bear.
Are You Ready to Sell?
The second thing a business broker will do is to help you know if your business is ready to sell. There are a number of questions to ask, and they will help you find the answers.
Is your business growing? How about your industry?
Is your business profitable?
Are there other businesses like yours for sale? (Your competition for buyers)
Is everything in your business up to date?
Are your accounting books in order? Do you have high financial visibility?
Even if it is not ready, your business can often be made ready rather quickly with the right guidance. The business broker can let you know what steps you need to take before putting your business on the market.
Keeping it Confidential
When you are selling a house, you want everyone to know. However, when selling a business, you may not want your family, your employees, and even vendors to know the business is for sale until the sale is close to final or even completed.
You don’t want to lose customers, employees, or suppliers before you can finalize your business sale and then work to ease the transition. If the sale does not go through for some reason, then people are not disappointed or have not been under stress that is not necessary.
A business broker can help you contact buyers discretely, use confidential data rooms and other online tools to keep sale details under wraps, and will help ensure that confidential information stays that way.
Finding Your Buyer
You may not know where to find the right buyer for your business, but the chances are that a business broker will, and will know how to get in touch with them. In fact, unless you are doing a management buyout of passing on your business to a family member, it is unlikely you will know your buyer at all.
A big part of the business broker role is making those connections, but it goes beyond just finding a buyer. They need to find a qualified, motivated buyer at the right time in the right place. This can often be a difficult task, but a business broker will be up to the challenge.
This is the process where the seller proves to the buyer that all of the things they claim about their business that make it desirable are true. This involves opening the books and the business and letting the buyer look inside.
At the same time, confidentiality is still key, and the buyer does not want to reveal all of their business secrets until the transaction is complete. The business broker helps with this process, and makes sure everyone has everything they need before the final purchase agreements are drafted and both parties agree to the terms.
Finally, the business broker leads the two parties to escrow. They ensure that the lender has everything they need, all regulations have been met, and that all necessary licenses and funding is in place. Once all this is done, the parties set a final closing date.
It is the job of the business broker to make sure this close happens, and that nothing unexpected derails the process. If something comes up, they try to make sure it gets dealt with.
Ready to sell your business? Have questions about what it is worth? If you are in Northern California, contact Rogerson Business Services today for more information. We’d love to talk with you about your business valuation and how you can find a buyer in the most timely manner possible.