Your best guide for buying
or selling a business isn't words on paper--it's the competent presence
of a business broker!
Although business brokers generally represent the seller,
the buyer also reaps the benefits of expert guidance. A business broker provides
vital services for both parties and acts as the "glue" for holding
together the pieces of the business sale process. Here's how a business broker
will work with both the buyer and the seller:
Business Broker and the Buyer
Business brokers prefer to talk to people in person, and the buyer
is no exception. During a preliminary meeting in the business brokerage
office, the broker will typically ask the prospective buyer questions
such as these:
1. Do you have the necessary funds to buy a business?
2. Is the cash readily available?
3. What is your time-frame for buying a business?
4. What are your expectations about the purchase
of a business?
After this fact-finding meeting, the broker can
then show the buyer businesses that are both feasible and that fit
the buyer's requirements. Further steps the broker will lead the
buyer through are as follows:
- Since sellers are (rightly) concerned about confidentiality,
the broker will ask the prospective
- buyer to sign a non-disclosure or confidentiality agreement.
- The broker will provide the prospective buyer with preliminary
information about one or more businesses, including pertinent
- The broker will arrange for the buyer to see businesses of interest.
- Once the buyer has indicated strong interest in a particular
business, the broker can then supply additional information and
schedule further on-site appointments
- When the buyer is ready, the business broker will be the best
source for answering questions, addressing concerns, resolving
loose ends, and offering a business broker's unique expertise
in the business sale transaction.
The Business Broker and the Seller
When it comes time to sell, one of the best decisions a business
owner can make is to continue managing his or her business efficiently
(and profitably), while depending on the services of a business
broker to orchestrate the steps of the sale. To make the seller's
job easier and more effective, the business broker will...
...Determine the right buyer for a particular business.
To locate and qualify prospective buyers, a business broker
uses computerized databases to access comprehensive lists of local,
national, and international buyers--all to increase the chances
of selling a business at peak value.
...Advise the seller on pricing. The business broker
is an expert in placing a realistic price on the business and incorporating
intangibles; thus reducing the danger that every seller fears--under-pricing
the business. At the same time, the business broker can help the
seller to understand that the selling price is dictated by the marketplace--not
by a well-meaning accountant or friend who may have an unrealistic
idea of what the business is worth.
...Prepare a marketing strategy and offer advice
about essential marketing tools, such as a business description
memorandum; in fact, the broker will help the seller in all key
aspects of presenting the business as effectively as possible. Later,
the broker can also help in the structuring of the sale transaction.
...Present offers and point out both strengths
and weaknesses. The business broker will be a vital advisor during
most stages of the negotiation, bringing to "the table"
objectivity as well as negotiation skills developed through years
of experience in the buying and selling of businesses.