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 anyone can technically list their business for sale, but do they know the ins and outs of what makes a business marketable or how to perform a business valuation? Do they have the connections to gain lender pre-approval for a qualified buyer? The answers to these questions are undoubtedly no. Not to mention, business brokers have a number of 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 lifecycle.
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.
Deal Negotiation. How many times has your friend of a friend negotiated the sale of a business? That one time they sold their 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 transactional 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 initially the previous owner 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 don't have to worry about operating a business in the background. They spend time obtaining required continuing education and maintaining their real estate licensing. They’re members of industry associations like the Colorado Business Brokers Association or the International 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 business and the deal close with the attention to detail necessary to ensure the previous owner obtains a good return on their 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.
Rachael Holstein has been the Marketing Manager for Transworld - Rocky Mountain since 2016. Her working experience has been largely focused on Business Development and Marketing in the finance, architecture, property management, and information technology industries. A long time resident of Cleveland, Ohio, she attained her undergrad from John Carroll University and her Master’s Degree in Global Interactions from Cleveland State University. In 2013, she relocated to Denver with her husband, Joe, and her furry companions to explore the mile high life!