If you’re considering selling a business, there are often rolls and rolls of red tape and reams and reams of paperwork to work through to make it happen. The question is – can you tackle it by yourself, or will you enlist the help of a business broker?
Here’s a little more on what a business broker is, and the pros and cons of bringing one on board.
What does a business broker do?
Much like a real estate agent helps you buy or sell your home, a business broker will help you buy a business, or sell your business.
Your business broker must be licenced, and these licences vary from state to state, so it’s important that you check your broker has the appropriate qualifications to operate where you’re making the purchase. All brokers also must update their licence each year.
The broker will help to ensure the sale goes smoothly, and can help you both negotiate the deal, and navigate the paperwork.
The benefits of hiring a business broker
The biggest benefit of using a business broker when considering a business for sale is their know-how. With the right training and plenty of experience, a broker knows what all the technical jargon means and can explain it clearly, they know the right questions to ask, and they can ensure all aspects of the exchange are completed properly, by following all legal requirements.
Whether you’re looking at selling a small business or a large one, a broker can also help you find good possibilities in your area. They often have a network of connections, so may know about potential buyers for your business.
Once you’re connected with a potential buyer, a broker may also help you to negotiate a better deal, or a more favourable agreement. Their experience in this area may help you save a large amount of money either in the sale itself, or down the track.
Going it alone without a broker
A business broker does of course come with a cost, and you may wish to weigh up their fees against what they offer when planning your sale.
Some brokers will require an upfront fee, as well as a success commission to be paid in full after the final transaction. There may also be a monthly retainer fee, so be sure you know the terms of your contract with the broker before moving ahead so you know what to expect.
Often, a broker is well worth their fees, as they can save you a lot of time, they may help to negotiate a better deal, and they can give you the peace of mind in knowing you don’t need to keep an eye on all the details. Unless you are confident in your own ability to tick all of these boxes, it is usually best to employ a broker for the transaction.
When you’re looking to sell your business, hiring a broker should be one of your first priorities.
Author: Hayley Clark
SEO Content Specialist
Hayley Clark is a content writer born and bred in New Zealand. She has been writing, editing, and working in SEO for over five years, for a myriad of companies, including Virgin Money, Thrifty, Destination New South Wales and Michael Page.