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How to Choose a Business Broker to Sell Your Business
Do you think the time has come to sell your business? If you believe that is the right move, you will need a reliable business broker. They are not easy to find nowadays, so take a look at some tips that will assist you in choosing the right agent for the sale.
Finding a Business Broker is Easy
Pick the most qualified is hard. Here is how to choose a business broker to sell your business
Do you think the time has come to sell your business?
If you believe that is the right move, you will need a reliable business broker. They are not easy to find nowadays, so take a look at some tips that will assist you in choosing the right agent for the sale.
Make Sure They Are Qualified
The first thing you want to ensure is that you will be doing business with someone who has the necessary skills. That means you need a broker who has the necessary licenses and qualifications.
Additionally, you may ask them whether they belong to an association or another professional organization in their niche.
Ask About Their Experience
It is not only about selling your company but also about putting it in the right hands. That is why you need an experienced broker with plenty of archived transactions.
Feel free to ask them about their experience across various industries. It is always wise to ask about the details of the latest transactions. Ask them how long it took them to close the deal, and whether you can talk to their past clients as a reference.
Ask Them About Selling Strategies
When meeting with the broker, they should tell you more about how they do things. That includes the strategies they use to advertise your business. It may include placing online advertisements on website marketplaces, as well as sharing on social media, or using contacts to find a potential buyer.
The best brokers out there mix all of these methods to find someone to purchase your business quickly. Additionally, they will make sure to screen the interested parties, and only meet you with serious buyers.
No Upfront Payments
When choosing a broker, you should be wary of those that are looking for upfront payments. The way agents do business these days is that they take a fee from the successful sale. You shouldn’t pay anything upfront as there is no guarantee that they can close the deal.
It is also wise to agree on the fee before you start the selling process. We understand that you want to save as much money as possible, which is why you may not go for the broker that asks the highest fee. However, pay attention to small charges, too.
Brokers often lower the price when they have too many companies to sell, and they don’t genuinely care whether they will successfully sell your business.
Agree on the Selling Price
A broker can tell you an estimated price based on his experience and skills. However, you should do your research regarding different valuation techniques. You can even try to find a business with similar characteristics to yours and see its selling price. That will be an excellent indicator of the cost you should go for when putting your company up for sale.
The important thing is to ensure that the broker will honor the deal. You may agree on the lowest and highest acceptable prices so that they have wiggling room. However, it is mandatory to specify that they won’t go below the lowest cost only to finalize the sale.
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PREPARING TO EXIT YOUR COMPANY
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THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.
Mistakes to Avoid When Selling Your Business
Are you selling your business? If so, make sure you avoid the mistakes listed here to ensure a successful and profitable transaction.
Mistakes to Avoid When Selling Your Business
To ensure a successful transaction
Are you selling your business? If so, make sure you avoid the mistakes listed here to ensure a successful and profitable transaction.
Selling your business?
In 2018 there were 30.2 million small businesses in America. In 2015 small businesses employed 47.5% of the private workforce in the U.S.
But there comes a time in every entrepreneur's life when they are ready to move on and sell their business. While the reasons for selling your business may vary, the goal is to walk away with a tidy profit.
You have to know what you're doing to ensure you sell your business for the most money. And there are tons of mistakes you can make.
If you're looking to sell your business, keep reading. We're sharing with you the biggest mistakes entrepreneurs make when selling a company.
Always Be Prepared Before Selling Your Business
Just like a well-thought-out business plan can help you grow your business, you need to do the same with your exit strategy. It's hard to get exactly what you want when you don't know what that is.
Collect Your Documentation
You'll need to gather a few key pieces of information in order to sell your business successfully such as:
Sustainable profitability projections
Identify and address lease issues
Identify and address staffing problems
No one wants to buy a business that isn't well run and well organized. This information will also help you set the price for your business that's on par with the current marketplace.
Plan Ahead and Start the Process Early
If you really want to be prepared to sell your business, begin the preparation process at least two years before you list it for sale.
Qualify Your Buyers
Another common mistake is not properly pre-qualifying prospective buyers. While you may think that qualifying a buyer too soon will scare them off, usually the opposite is true.
Instead, the pre-qualification process helps draw those buyers deeper into the sale. If you're worried about giving buyers access to sensitive information, have them sign documents such as a confidentiality agreement and financial background information.
This process will help you attract only serious buyers which means you won't waste your time wooing the wrong buyers.
Hire the Right Team
While it may seem like a good idea to try to save some money when selling your business by not hiring professional help, it's usually not. There's just too much at stake.
An investment broker and/or business broker can help you present your company in the best light.
How a Broker Can Help
They know exactly which databases to advertise your business on. They also know how to do the following tasks:
Preparing documents
Identifying buyers
Generating interest
Soliciting offers
They'll also help close the deal as quickly as possible.
How Other Professionals Can Help
But you may also want a transactional attorney to help with the following tasks:
Preparing an asset purchase agreement
Negotiating an asset purchase agreement
Handling documentation such as bills of sale and officer certificates
An accountant can help you structure your deal and help you plan ahead of potential taxes you'll have to pay. And a business appraiser can help you evaluate your business so you know what it's really worth.
Work With Us
Selling a company is a difficult process. It's important to surround yourself with the right team to help you save time, money, and prevent potential problems from arising.
We can help. Our team of knowledgeable experts can help make selling your business easy. Click here to learn how.
BizNexus -Learn More From Our YouTube Playlist:
PREPARING TO EXIT YOUR COMPANY
Have you checked out our podcast?
THE BIZNEXUS ROUNDUP
Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.