Buying and selling your business can be a stressful, complicated and time-consuming project. A business broker is there to take some off the pressure away from you, make sure you get the best possible deal, and negotiate on your behalf.
The main point of a business broker is that they act as an intermediary between sellers and buyers of a business. Dealing directly with the person you’re buying or selling from can feel a little daunting, especially if you haven’t done it before and you’re not experienced with negotiating techniques. The broker will be able to tell you if your price is too high, or whether the offer you’re thinking of making is likely to be deemed unreasonable by the seller.
When you’re looking to invest, a business broker can help you find the right business. They should start by discussing your skills and interests, finding out exactly what you want from your business, and steering you in the direction of something that will suit you. You might even find that you change your mind after talking to a broker, and although you may have had your heart set on running a bed and breakfast, you could end up fired up with enthusiasm for a pub or even a petrol station!
The right broker will be able to give you advice on the business sector that you’re interested in, as they will know the markets, the competition and the issues that affect either buying a business in that sector, or trying to sell one. You should be able to ask for their advice about pricing, finance and anything relating to the transaction.
Screening potential buyers and businesses
A good broker should screen potential businesses before taking them on, and make sure everything about the company is in order. If a seller hasn’t given full financial information, or refuses to reduce the price when a business is over-priced, a broker will often refuse to take them on.
If you’re selling a business, it can be hard to tell the serious contenders from the speculators and “not-really-sures”. A broker will have seen it all before and be able to spot a serious buyer. A decent business broker should be able to identify the buyers who have the finances in place and the ability to take on and successfully run a business.
Being the go-between
One very important part of the process is negotiating, and a good business broker will be experienced in working on behalf of clients to ensure that they both get the best deal. Having a broker negotiating the agreement and helping to sort out any issues that come up can be really helpful, and avoids any breakdowns in communication.
Finance and admin
Some brokers offer tailored finance and insurance packages, either through their own companies, or trusted partners. The bonus is that the recommended financial partners are likely to understand the areas of business that you’re trying to buy into, and so can identify any potential pitfalls or opportunities that you might not have thought about.
Selling and buying a business involves a huge amount of time-consuming paperwork, and handing this over to a professional means you have more time to get the plans in order, without worrying that you’re going to miss something crucial. A good business broker will be knowledgeable about all the laws and regulations affecting your business, and be able to handle the form filling and red tape involved in applying for licenses and permits. Just having someone who knows their stuff when it comes to the administrative side of things can really help speed up the process, and take away some of the stress.
You don’t have to use a business broker when you’re looking for a business to buy, or even when you sell yours, in the same way that you don’t need to use an estate agent to sell a property. The broker is simply there to help make the process run smoothly from start to finish.