Deciding to sell your business after realizing entrepreneurship isn’t for you is a big decision. You will have to take steps to make sure the sale of your business meets all of the legal requirements, and nothing will come back to haunt you years later. To make the sale go much easier, you could hire a business broker. Getting the choice of a business broker wrong, as many business owners do, can be an expensive error. To help you avoid this mistake, here are the top things you need to know about business brokers that business brokers won’t tell you.
The Basics
Simply stated, a business broker is a person or a firm that helps business owners to sell their business. However, there are quite a few companies who sell businesses but don’t call themselves business brokers. You could miss out on some of the top talents if you only search for business brokers. Many companies and individuals say they can help you sell your business but will take advantage of you. You want to really spend time researching the ends and outs of selling a business.
How Does A Broker Sell A Business?
There is a big difference in the amount of effort that various brokers put into selling a business. This includes finding potential buyers, how they close deals, their success rates, and the price they get for their clients. It may not be practical for smaller businesses to use an intermediary. With what you would have to pay in brokerage fees, you could end up not having any profit left from the sale. However, brokers do make sense if you have a larger business to sell.
Brokers Don’t Sell All the Businesses They Take On
Brokerages make many claims about their success rates, but even the most successful brokers often only sell a small percentage of the businesses they take on. Make sure you look into the success rates of the broker you want to hire. Ask for their advice on what you can do to improve your chances of selling your business. You should also reach out to others who have used their services to see what the experience was like.
There Is No National Regulatory Body
Something to keep in mind is that there is no regulatory body that overlooks business brokers. You also don’t need to have a qualification or license to practice as a broker in many countries. Some countries have a reputation for having some very questionable people operating as brokers. Because of the shady behavior of a few bad brokers, the whole industry has developed a bad reputation. If you need help from a broker, make sure you choose a legit and reliable firm such as the Business Brokerage Firm of Arizona.
Don’t Disclose Everything
When you start making inquiries of brokers, you need to be cautious about what you disclose right away. You don’t want to disclose too much until you decide you want to work with the firm. Be very careful about confidentiality and check what you can and should disclose before you start talking.
Look For A Specialist
Some brokers specialize in selling businesses in a particular industry or sector. There are some real advantages to using a specialist as they can often get much better prices than other brokers. Finding a specialist is not always easy, so you will need to invest some time into searching for these brokerage firms and sifting through their websites to find the best one.
Don’t Forget The Fees
When you’re considering the fees your broker will charge you, the choice isn’t as simple as choosing no-sale-no-fee or paying a retainer. Some of the brokers who offer no-sale-no-fee are very exploitative and should be avoided. If you choose to pay a retainer, make sure you’re getting value for money.
Ask The Questions
When you’re interviewing brokers, don’t hold back on asking questions. Hiring a broker is an important decision so take time to think about what you want to ask. Don’t be fooled by a well-practiced sales pitch. Plan your questions and make sure you get the answers that you need.
Fees Are Negotiable
A lot of brokers won’t tell you that their fees are negotiable. If you’re savvy at negotiating, you might be able to save yourself tens of thousands of dollars in fees, if not more. Just make you do and say the right things to get the best deal. To get a lower price, it’s not a case of just making an offer lower than the quote you were given. Make a sound, reasonable offer that the firm will truly want to consider. It will also help them decide if they want to do business with you as well.
Read The Contract
As with any deal, you need need to read the contract very carefully. It’s also a good idea to get the contract looked over by a lawyer that you trust. Some broker contracts seem simple at first glance, but there can be a lot of hidden details. Take your time, so you don’t miss anything. If there is something you want to be added to the contract, ask. You want every aspect of the deal to be included so no hidden fees come up when closing the deal.
If you are considering selling your business, a business broker can be a great asset. Be sure to do your research so you can find a firm that meets your needs. Once the deal is completed, you’ll be set to start your next adventure. Here’s to YOUR success!
Carolyn R. Owens has over 25 years of proven experience and serves as a Career Strategist, Leadership, and Mentor Coach. She is the Chairwoman and CEO of Infinity Coaching, Inc., where they help you up-level your skills so you can up-level your income. Infinity Coaching, Inc. provides one-on-one and group coaching, organizational training, and personality assessments. She is most noted for the Multi-Cultural Dialogue and Learning Cohorts she facilitates. Carolyn is certified to give the Energy Leadership Index and Myers Briggs Type Indicator (MBTI) assessments. You can find out more about both assessments and other products and services at https://infinitycoaching.net.
