Owning a business requires you to give your all, and it’s no different when it comes to selling it, either. Just as you would strategically set up all the right connections to ensure your business runs successfully, having the right business broker is the way to get all the right connections to sell your business, but that’s not all they can do for you.
In this article, we’ll give you a quick overview of what a business broker does, how you should go about hiring one, and the various benefits they would offer you and your business.
What is a business broker?
Hiring a business broker would be the first step you’d make once you’ve decided that it’s time to sell your business. They are a highly trained individual with relevant and extensive experience in the industry who will represent a business throughout a sale. In most situations, a business broker would get a commission based on a percentage of what the business sells for. Business brokers also represent buyers and investors, aiding them in finding a suitable business to invest in for their specific preferences.
What does a business broker’s job entail?
In a nutshell, business brokers handle all the administrative work surrounding the sale for you. When a broker is hired by a business to facilitate the sale of their company, their job will entail everything related to that sale, including:
- Reviewing the business books and operation standards in an endeavour to create a strategy to optimise it.
- Conducting the valuation
- Creating a marketing strategy
- Marketing the business in respective investor circles to source a reputable buyer,
- Negotiating with potential buyers
- Ensuring legal compliance
- Closing the deal.
How a business broker can help you
Hiring a reputable business broker can do a lot for you and your business. For instance, whether you want to merge an existing business with your own or sell your business to retire, they can facilitate it all. Their main goal is to ensure that you get the best deal possible when you sell your business.
The lure to hiring a business broker isn’t in their ability to do the administrative work for you but in their knowledge and connections. There are other options for selling your business, like doing it yourself by hiring a realtor, lawyer, or accountant. A business broker specialises in selling businesses, so, by having them in your corner, you’ll have their knowledge of the markets and what businesses are more likely to sell, as well as their network of investors who might want to purchase your business, resulting in a faster sale.
The benefits of hiring a business broker
Aside from having their knowledge and experience, here are some other benefits of hiring a business broker:
- Developing a successful business takes a lot of time, effort, and financial resources. Because of this, many business owners can often form an emotional attachment to their business, which acts against them as they try to sell it. Hiring a business broker can separate you from the sale process, allowing you to only be in the loop for final decisions and mitigating the risks of your emotions getting the better of you
- Following our last point, it's understandable to want the right buyer to take over your business, not someone who’ll strip it for parts and sell it. A reputable broker will respect your wishes and assist you in finding a qualified buyer for your business
- Finally, business brokers, particularly those who’ve been in the game a while, would have networks of investors and other brokers who they can reach out to to assist in selling your business. This will ensure that you don’t sit for years before your business sells and that the process goes smoothly
Important questions to ask a business broker before hiring them
Finding a reputable business broker might be one of the major challenges you’ll have as you start the process of selling your business. Thankfully, there are many reputable business brokers out there who’ll be happy to help you, like Adelaide business brokers. That said, here are some helpful questions to ask a broker before you get into business with them:
- How long have you been a business broker?
- How many businesses have you sold? Any well-known businesses you can get a reference for?
- How long does their average transaction take?
- Do they have a good connection to prospective buyers?
- What marketing strategies do they usually use?
- What is their commission structure?
- Do they require an upfront payment?
Some business brokers might require an upfront payment to ensure that you’re committed to the sale of the business. That way, if you pull out of the sale halfway through and they’ve done the work, they would still have been paid for their services.
Final Thoughts
Sure, you can manage your business sales yourself, but with all the legal requirements and the administrative work of the sale, you’ll definitely have your hands full. When you hire a business broker you’re hiring a professional who’s been trained to understand the market and to know exactly what is going to get your business sold.
