Broker Needed

(1) The hope that by dealing directly with the buyer, the net sale proceeds of the business will be increased because no brokerage commission is involved;

(2) The fear that the broker will somehow coerce or force the seller to enter into a transaction against the seller’s will.

While it is true that a commission is payable when a broker is involved, we believe that the value added to the transaction usually exceeds the commission fees. The structure of a transaction is often a critical factor in determining what a seller will walk away with when the transaction is over. Maximizing the sale price does not guarantee maximum return. A skilled intermediary can help negotiate the deal structure that is best for you.

A look at the process of selling a business should allay any fears about pressure to accept a deal that will not be in the best interests of the seller. Throughout the process sellers are encouraged to seek the help of competent professionals to ensure that their interests are protected. A skilled intermediary will work with the seller’s attorney and accountant or will recommend attorneys and accountants who are experienced in working through the various aspects of a transaction. If the Broker is acting as a “Seller’s Agent” the Broker has a fiduciary duty to represent the seller’s best interests.

In addition to the financial gain usually associated with the use of a business broker, there are other items an experienced broker brings to the table: confidentiality, screening and pre-qualifying potential buyers, a customized marketing plan, and the possibility that their pre-identified and pre-qualified buyers list contains the right buyer for the business.

Confidentiality. Most sellers have the legitimate desire to keep a pending sale confidential as to employees and competitors. How, then, does a seller reach the people who have the interest and wherewithal to purchase the business? Do key employees leave the business when faced with the prospect of a sale, leaving the owner to scramble to fill the position or to do the work him or herself while marketing the business, screening prospective purchasers and answering questions from “tire-kickers”. Or worse, will the competition take away business if customers get nervous upon hearing of a potential sale? An experienced intermediary lessens those concerns. Keeping the sale confidential is an important part of the job, through blind ads and non-disclosure agreements with potential purchasers.

Screening and Pre-Qualifying Prospective Purchasers. An experienced business broker will obtain confidentiality agreements from potential purchasers, as well as a statement of financial qualifications. Their contacts with various lenders should help smooth the transaction by helping the buyer obtain acquisition financing and assisting the lender with required documentation.

It is particularly important to understand that when you work with a business broker as a Seller’s Agent, the broker is on your side, working with the purchaser to negotiate details and working with lenders, attorneys and accountants to smooth the transaction and obtain the best deal for the Seller. Like any other advisor, you must be comfortable with the professionalism and integrity of the broker that is working with you.

Marketing. Do you advertise the sale in the newspaper? Online? With signs at your place of business? These questions are best answered by professionals who are experienced at getting the phone to ring and then weeding out the tire-kickers from the buyers. A comprehensive marketing plan will include a detailed presentation package.

Pre-Identified Buyer Lists. A great advantage to using a business broker is that a broker is already in contact with many buyers and knows their qualifications and their search criteria. Often a deal can be put together by using pre-identified, pre-screened purchasers already in the broker’s database.

Small Business Realty, Inc., has the experience to help you determine how to position your business for sale, how to value and to confidentially market your business, and how to find qualified buyers. Call us for a no-cost, no-obligation valuation. We’d love to help you through this challenging time.