Why Use A Broker, Can’t I Sell My Business Myself?

Definition:  Business acquisitions brokerage: n. 1) A Business Broker is a provider of innovative, professional representation services, qualifying selected Sellers and Buyers, to enable the effective transfer of ownership of a business. 2)  The firm whose only business is selling businesses. 3) The right way to sell or buy a business.

Question: WHY CHOOSE TO USE A BUSINESS BROKER RATHER THAN TRY AND SELL MY BUSINESS MYSELF?

Answer: The principal value of a business broker is to serve as a qualified professional who can act as a buffer between the buyer and the seller.  A broker can say certain things to a buyer and certain things to a seller, which may result in a positive and productive discussion.  The broker can explain to the seller why his price is too high and relay to the seller what needs to be accomplished to make a deal.  The broker can do this with the seller openly and candidly.  In this way, the broker may assist in bringing and keeping both buyer and seller on path and reach a successful business transaction and closing.

Prescreening Businesses: If you are in the market to buy an existing business, a broker can help you find a business for sale that fits your financial parameters, location, industry and size.  For these services, the broker will typically charge a commission of 8 to 10 percent of the purchase price.  However, the assistance and guidance a professional business broker can offer, especially to the first-time buyers, is worth every cent of the success fee.   As a buyer, a qualified business broker can assist you by pre-screening businesses for you.  Did you know that good brokers turn down many of the businesses they are asked to sell, either because the seller will not provide significant and complete financial disclosure or because the business is overpriced.  Going through a broker helps you avoid the time consuming bad risks.

Helping you pinpoint your interests: A good business broker starts by finding out about your skills, interests, and then helps you select the right business to purchase.  With the help of a broker, you may discover a business that you never considered purchasing and may be ideal for you.

Negotiating: During the negotiating process is when brokers really earn their keep.  They help both parties stay focused on the ultimate goal and smooth over problems along the way.

Assisting with paperwork: Qualified business brokers know the latest laws and regulations affecting everything from licenses and permit that will be required to financing, lease negotiations with the Landlord and finally, closing at escrow.  They also know the ways to cut through red tape, which can slash months off the purchasing process. Working with a qualified broker reduces the risk that you will neglect some crucial form, fee or step in the process.

Closing in Escrow: The business broker will work with and prepare the escrow officer with all documents, leases and sales agreements necessary for a smooth closing.  It is only upon and after a successful closing that the broker receives a success fee.

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