What is the Role of the Business Broker in a Business Sale
Those looking to buy or sell a business often wonder about the role of a business broker in the process. Does it make sense to use the services of a broker, or are you better off entering into the transaction on your own? How can a business broker help the seller or the buyer during the transaction?
Business brokers are intermediaries who consult with sellers and buyers and help facilitate the sale of a private business. Brokers typically work with small to medium-sized entities, and they work to match the right buyer with the right seller with the goal of a win-win transaction for both sides. Business brokers are similar in some respects to real estate agents, though they deal exclusively with the buying and selling of businesses.
From the Seller’s Standpoint: Business brokers work closely with sellers from the moment they decide they want to put their business up for sale. It is best to prepare for a sale well ahead of time (up to a year in advance if possible) so there is enough time to get organized and have the business ready to attract a good price. Business brokers work closely with sellers during the preparation period to analyze the specifics of the business and go over goals and timelines.
Another important role the broker plays for the seller is marketing the business for sale. Using data from comparable transactions in the same industry and other important factors, the broker helps set a price that the seller can be confident with. In addition, reputable brokers have access to a wide network of prospective buyers, and they use tested and proven marketing methods to reach a large pool of prospects while maintaining confidentiality throughout the process.
From the Buyer’s Standpoint: Brokers provide guidance, resources, and other advice to help prospective buyers make the right decision. Many buyers go into the process with a certain business in mind, while others are not sure exactly what they want. Either way, the sheer number of available businesses for sale can be overwhelming. A broker can consult with the buyer to help narrow the choices to the listings that best match their passion, skills, and budget. This saves buyers time and allows them to quickly zero in on only the businesses that might be a good fit for their situation.
Working Toward a Successful Transaction: Professional business brokers deliver value to both sides in a business transaction. They help sellers prepare for the sale of their business and market it to the right buyers, and they help buyers find the business that is right for them. Brokers have extensive training, experience, expertise, and an in-depth understanding of the business sales process. Whatever side of the sale you are on, working with a business intermediary can ultimately save you time and money and vastly increase your chances of a successful transaction.