Why consult with a Business Broker?
1.Selection – A professional business broker has access to many businesses through his/her various networks. Business sales involve a great deal of confidentiality so they are often not advertised to the general public. Your business broker knows where to look for businesses for sale and will be able to show you businesses you can not ordinarily find on your own. You can’t make a wise choice if you only have one option.
2.Local Knowledge – Your business broker will know about competitors, licensing, banking relationships and other information that will be essential to your future success. The broker can recommend attorneys, accountants, insurance agents and many other vendors that you will need.
3.Process – The successful sale of a business involves many steps. These specific actions work best if they are completed in a specific order. For example we don’t start negotiations with the landlord until the financial records are approved. There is no need to disrupt the seller’s relationship with his landlord if the financial records are not acceptable. We don’t start financial due diligence until the seller has accepted your offer. Why spend time and money on accountants if the seller won’t accept your price and terms? There can be many steps unique to each business sale. Your professional broker will lead you through all of these steps in the proper sequence to arrive at a successful closing.
4.Documentation – Your business broker will have access to standardized forms that protect buyer and seller. These forms will cost thousands of dollars if they need to be created from scratch. Often, unless your attorney is fully versed in the process, his documents might be incomplete or fail to address important items. Often, documents drawn by your attorney will be very one-sided. This can lead to extended negotiations between buyer and seller attorneys. This process can cause long delays and add thousands to your costs. Our documents have been used in thousands of transactions and have been refined over the years to fairly handle almost any transaction issue.
5.Numbers – Your business broker will have knowledge of and access to important numbers. What is the asking price of similar businesses? What was the final sales price of recently sold businesses? What should the rent factor be for a business like this? What is the typical Cost of Sales for a business in this industry? What is the typical profit margin for a business like this? There are many important numbers besides price and profit. Your business broker can provide a sanity check to help you determine if this business is showing numbers that make sense.
6.Closing – Your business broker working with an attorney specialist will coordinate all of the closing activities. This will include collection and disbursement of funds, transferring the lease and utilities, arranging for inspections, etc. There should be NO SURPRISES at closing.
Don’t go it alone! When you seek the counsel of an experienced business broker you significantly increase your odds of success.
With very high unemployment in the country, many out-of-work executives will seek to buy a small business. If you have ever considered selling your business, this may be an excellent time. Please feel free to call me for a Confidential, No Obligation discussion. With a little bit of information, I can tell you how your business might sell in this market. This is an excellent time to market a business that is weathering the current economic storm. The good ones will surely bring a premium.