Whether a person is buying or selling a business, business brokers can assist with the process and help ensure a desirable outcome.
What are Business Brokers?
Business brokers are professionals in the field of buying and selling businesses. For this article we will focus on the selling side of the process. Business brokers serve as a guide and intermediary for main street business owners throughout the business selling process, and for their services they are paid a percentage of the sale amount. Ultimately, business brokers help owners achieve the maximum value and best result, financial and otherwise, from the sale of their business.
What Do Business Brokers Do?
The business selling process involves many steps, all of which can benefit from a business broker’s expertise.
Business Valuation
The work of a business broker actually begins before the selling process gets rolling. Determining the business’s value is essential, and it is nearly impossible to accurately determine the value of your own business. Obtaining a business broker’s professional business valuation is an important foundation for the selling process. At this point a broker will also do a pre-screening with a lender to be sure the business meets current lending guidelines.
Marketing
Business brokers package and market a business for sale on behalf of the owner. It is important to note that brokers are able to do this confidentially, which is a significant benefit over a seller trying to market their own business for sale. Business brokers use a business’s summary profile to market to a network of prospective buyers, as well as through other traditional marketing channels including direct mail and online.
Buyer Vetting
Not all prospective buyers are equally qualified, so business brokers have the responsibility of pre-screening any interested parties. When they receive inquiries in response to their marketing efforts, brokers evaluate those prospective buyers to ensure they are financially capable of buying the business and that they are a good fit for the company based on the owner’s goals.
Negotiations
When offers come in from prospective buyers, business brokers help to guide their clients through negotiations. While the decision to accept, reject, or negotiate remains the owner’s, the broker provides guidance on not only the financials but also the terms and conditions and any other agreements, ensuring the owner understands and is comfortable with all aspects of an offer.
Pre-Closing & Closing
When buyer financing and due diligence are complete, it is time to draft closing documents and finalize the sale. Good business brokers continue to guide and assist their clients through the completion of closing in case there are any last minute questions or concerns and to ensure the seller collects their funds and all of the necessary documentation when they leave the closing table.
Benefits of Using a Business Broker
When considering what business brokers do, there are three key benefits of using a business broker instead of selling a business on your own.
Confidentiality
Given that confidentiality is of the utmost concern when selling a business, this is arguably the number one benefit offered by business brokers.
Buyer Network
Business brokers typically have access to networks of thousands of prospective buyers. This is in addition to those they will reach through their strategically targeted marketing campaigns.
Objective Expertise
Selling a company can be a stressful and emotional process for someone who has poured their life into a business. Business brokers can offer objective guidance toward achieving a desirable exit.
How to Choose a Business Broker
When it comes to identifying someone to help guide and represent you through one of life’s most significant transactions, there are a few factors to help you choose wisely.
Experience
Consider the experience of the brokerage or M&A firm. How long have they been in the industry? What sort of businesses have they represented in the past? A firm’s breadth of experience can help you choose confidently.
Success Record
What is the firm’s track record of successful closings? Perhaps they have been around for awhile, but how effective are they good at what they do? A firm’s success record can give you a good deal of insight.
Associations and Accreditations
Is the firm a member of any trade associations like the International Business Brokers Association (IBBA)? A firm’s voluntary membership in associations which uphold ethical standards of conduct and professionalism can add to your peace of mind.
Why You Should Consider Viking M&A
The business brokers and advisors at Viking Mergers & Acquisitions have been serving business owners for over 25 years. In that time, we have closed over 600 business transactions in a wide variety of industries. Our success rate is 3X the industry average, and the businesses we list, on average, sell for at least 96% of the published asking price. Viking M&A is a member of IBBA and Carolinas-Virginia Business Brokers Association (CVBBA), as well as BizBuySell and BrokerWorks.
If you would like to discuss how the business brokers and advisors at Viking M&A could help in the sale of your business, contact us today.
