If you’re considering selling your business, it’s important you go into it the right way. You want to get a fair price in the sale, and ideally you’d like to sell it to someone who will carry on running your business with the same love and care you have.
Hiring a business broker may make the transition out of your business easier, but is it necessary to hire one in order to sell a business?
What Business Brokers Excel At
Business brokers represent you, the seller, during the sales process. They usually have a network where they can seek buyers for your business, so you cut out a lot of the riffraff (read: not serious buyers) and they find you interested parties faster than you could by posting your business for sale online.
Brokers negotiate the right deal for you. That means they’ll work to get the best price for your business as well as any stipulations you want in the contract (such as requiring the new owner continuing using your grandmother’s ice cream recipe).
If you don’t want word to get out that you’re selling your business, a broker can keep it under wraps. Because the sale doesn’t have to be announced publicly for them to find a buyer for you, you can keep running your business without scaring off customers or employees with the news that you’re selling.
A broker can also help you assess a potential buyer beyond what his or her financials tell you. A broker may be able to gauge whether this person will keep the brand reputation going strong, simply because they have facilitated a lot of business sales.
Why Brokers Earn Their Keep
Many business owners decide against working with a broker because they figure they can cut out his fees by handling the sale on their own. While that’s technically true, it doesn’t always work out that you save money by not employing the assistance of a business broker.
Yes, you pay the broker a commission on the sale, but they earn it by helping you find the best qualified buyers to keep your business reputation living on past your involvement, and can help you get those stipulations you want. The broker knows the legalese, which you might not feel comfortable dealing with on your own.
Questions to Ask a Business Broker
If you do decide to hire a broker to help with the sale of your business, don’t be afraid to ask plenty of questions. It needs to be a good fit, and you want to ensure the person you choose has got the industry experience to help you find the right buyer. To that end, ask the broker:
- How many businesses like mine have you sold?
- Do you have references?
- Are you certified?
- Are you a part-time or full-time broker?
- What valuation model do you use?
- Where do you find buyers?
- How long on average does it take you to sell a similar business?
- Do you help with the sales contract?
You’ve put a lot of hard work into growing your business. Having the right partner on board when you’re ready to sell can help you make a smooth exit.