Business brokers / Business transfer agents, M&A consultants or Corporate finance consultants are individuals who are experts in their fields and work to assist clients to sell their businesses. In simple terms, they act as a bridge or intermediary between the person selling the business and the buyer in the sale process. In most cases, business people or entrepreneurs opt to use a third party to assist them in the marketing and selling of their business.
Selling a business is a significant step for an entrepreneur to undertake; therefore getting a proper valuation of his or her business is critical. Also, selling the business can take a large amount of time and effort, therefore; it is always advised that the person selling a business should get professional assistance. Understandably, that is where a business broker / business transfer agent comes into play. Many entrepreneurs will opt for a third party. However, it should be noted that not all brokers operate the same. Therefore, if the person decides to have a business broker, they should choose with great care to ensure that they get the maximum value out of the sale.
The owner can find business brokers in various places. For instance, the person may search the internet, yellow pages, publications and industry specific magazines. Upon finding one, the business broker charges a fee, usually a small upfront fee coupled with a percentage of the final sale price achieved for the business.
Some of the top reasons somebody should use a business broker / business transfer agent to sell their business
There are many advantages associated with hiring an experienced business broker. Below are a few of the benefits:-
In most cases, when a person opts to sell their business, he or she may not wish the competitors, employees or even customers having knowledge of what is going on. A business broker / business transfer agent will keep the details of the sale strictly confidential. In fact, they will require that all potential buyers of the business sign a confidentiality agreement after which they can be deemed as qualified serious buyers. Upon signing the agreement, the prospective buyer can then be issued with the details of the business for sale.
- Qualified buyers
Expert business brokers will ensure that all prospective buyers are qualified buyers. Upon qualification of a customer, the business agent validates the financial capacity of the purchaser to establish how serious the buyer is about making an offer for sale.
- Staying focused/ business continuity
The business broker works independently from the business owner, and as a result, the business owner can maintain focus on the business while the business broker concentrates on the sale. The business owner thus ensures the smooth running of the business instead of dealing with general inquiries. The broker normally has a database of potential buyers who are looking to buy a business hence reducing the waiting time. In the end, the risk of deteriorating or inhibiting the prospects of the business during the sale is avoided.
- Emotional detachment
A business broker / business transfer agent remains dispassionate through the sale process and focuses on selling the business without any emotional attachment that the business owner might have, thereby preventing the risk of making bad decisions.
Business brokers will minimize the risk of prospective buyers defaulting on their finances. The business broker will request full financial disclosure from the potential buyer. Also, their past business dealings and expertise with potential qualifying buyers reduce the possibility of the deal going south.
- Valuing the business
Putting a correct value on the business is usually a hard task for most business owners. Since every business is different and there exist various factors that affect the business value, getting the correct value can be a complex task. However, business brokers usually have access to databases containing business transactions which they typically use as guidelines. Nonetheless, the best way in which the business owner will feel that he got a good deal is by having several financially viable bidding parties which is more likely using the resources and facilities of an experienced business broker.
The business broker can present the business in the best way possible to the potential buyers to maximize the sale price. The broker normally has the full knowledge of the critical values that prospective buyers are looking for.
- Closing the deal
Being that the primary obligation of the business broker is to sell the business, there is a much better chance that a deal will be concluded within the shortest time possible. The quicker the sale of the business, the lower the risk of the owner addressing issues such as employee problems, customer defections as well as predatory competition.
A business broker / business transfer agent can efficiently manage the sale of your business whilst maximizing the value of the sale price. Please contact us at Bernard Baxter by filling out the contact us form on the right hand panel or email email@example.com for any questions or to request further information.