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What Does a Business Broker Bring to the Table?
It's not uncommon to hear of a friend of a friend who sold their business without representation, but have you heard whether the deal was actually good or if their business suffered while it was for sale? Usually those details are kept under wraps and for good reason. Because the answers are likely, the deal was difficult, the sale price was much lower than expected, and, yes, the business suffered greatly. So it's important to address how to sell your business properly and what a business broker brings to the table when representing a business for sale.
Marketing. Sure, technically anyone can list their business for sale, but do you know how a business is appraised? What makes a business marketable, what is it worth, and what makes it worth more or less to buyers? Do you have connections to lenders who will do pre-approval for a qualified business? Do you have memberships or subscriptions to all of the dozens of business brokerage listing services and professional groups? Do you have a database full of buyers that has be cultivated by lots of business listings? Do you have industry-leading legal forms for all the paperwork required for a transaction? Do you have templates and systems for marketing, and policies and procedures for dealing with buyers? Do you have professional training on how the complex process of selling a business works, and about what errors or omissions might lead to huge legal entanglements, criminal charges or lawsuits? Do you have the time to vet out all the tire-kickers and unqualified buyers, deal with lots of inquiries, and keep your patience when buyers may insult you and your business? Can you afford to take your attention off your business, prioritize selling your business instead of running it, and the costs you may pay if employees and/or customers figure out that you're priority is to sell your business?
Unless you're an active business broker, the answers to most, if not all, of these questions are probably no. Business brokers have protocols and processes in place to ensure the confidentiality of the business is kept intact during the sale process.
Working with a business broker is really the best way to sell a business. The confidentiality factor alone is highly important, because if customers or vendors find out the business is for sale, they may think the worst and jump ship, causing the business to perform poorly during a key time in its life cycle.
Also, note that in many states, including Nebraska and Iowa, there is NO LICENSING REQUIREMENT for business brokers. That means anyone, from a real estate agent to some untrained guy with a web site, may CLAIM also to be a Business Broker. BEWARE! You should only work with a trained and active Business Broker!
Buyer Reach. Aside from working with sellers, a business broker is always working with a network of buyers with specific business needs in mind. So when an owner brings their business to market with a broker, they may already have a buyer interested in a purchase. In addition to these actively searching buyers, business brokers maintain a database of active buyers who are looking to grow through acquisition or who are just waiting for the next interesting business opportunity to take purchase action. Finally, a business broker has the experience and resources to reach strategic or synergistic buyers for a business that can go a long way in getting a deal done quickly.
Business brokers have many resources available to get you a much better selling price than you can get on your own by creating competition among a large pool of buyers. They also are invaluable as an intermediary keeps you and the buyer at arms-length, avoiding emotional feelings that may ruin deals.
Deal Negotiation. How many times has your friend of a friend negotiated the sale of a business? That one time they sold their own business, right? A business broker knows how to sell your business and has the necessary expertise required to negotiate and close on a transaction that the general public does not. They know how to identify potential hurdles, they have access to specialized attorneys, and have processes in place to ensure the transaction moves forward as it should. And one key item to consider, especially when it comes to deal negotiations, is that if they aren't done correctly from the start the seller can leave themselves open to costly lawsuits down the road.
Focus. One of the biggest takeaways to consider when asking yourself what a broker brings to the table is that this is their job! Day in and day out they work to match buyers with sellers and visa versa, and they don't have to worry about operating another business in the background. They spend time obtaining required continuing education and maintaining their professional designations. They're members of industry associations like the American Business Brokers Association. They have access to a large network of local and global support professionals in finance, business brokerage, tax planning, and the law to ensure that their clients have every resource they could need to get a successful transaction completed.
At the end of the day, a business broker is going to have the education, network, tools, resources, and necessary licensing to manage the sale of businesses and close the deal with the attention to detail necessary to ensure you get a good return on your business ownership investment.
If you would like to speak with a broker about how to sell your company, we invite you to schedule a complimentary consultation today.
Schedule Your Consultation Today by contacting John Fullerton: Email: Jfullerton@tworld.com; Telephone: (402) 213-9945
John Fullerton has been a Business Advisor with Transworld Business Advisors since 2017. He is also a licensed Real Estate Broker with Keller Williams in the metropolitan Omaha-Council Bluffs area. He helps people buy and sell businesses, franchises and buildings as an experienced and trained Business Broker and Real Estate Broker. He worked in farming and construction in his youth, earned Bachelor's and Master's Degrees from the University of Kansas, is technically certified in computer networking, and has completed extensive coursework in real estate with a 4.0 GPA. He has more than twenty years' experience in senior management positions, working with educators and businesses as a non-profit executive, manager and entrepreneur. Fullerton formerly served as Executive Director of the Kansas Association for Career and Technical Education, Administrative Manager for the Midwest Roofing Contractors Association, Executive Vice President for the National Frame Building Association, President of Heartland Perma-Column (a company he started by himself and later sold), Manager of Astro Buildings, Inc. and is the proprietor of Transworld Business Advisors in Omaha. He is dedicated to helping buyers find the right business or franchise for their future, and helping those with mature businesses find the right buyers. He also enjoys scuba diving, fishing, camping and Boy Scout and Girl Scout activities with his children. He and his wife, Traci, have three children and reside in Bellevue, Nebraska.
Email: Jfullerton@tworld.com; Telephone: (402) 213-9945; www.buysellbusinessomaha.com
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