Business Brokers - Sell Business - Business Sales and Acquisitions - SunbeltNE

You’ve probably started and grown your business for years before deciding to sell it. Once you have decided to sell your business, you need to determine whether you want to do it yourself or hire a business broker. Most industry experts will advise you to hire a business broker; and it is the right advice. Hiring a business broker for your business for sale is the right step for you if you do not have previous experience of selling a business. If saving the commission payable to the broker is on your mind, think again: nothing beats the advantages a business broker can offer you.

• A business broker has the relevant experience that is required to close a deal. He/she is familiar with the steps to be taken and knows the process in-depth. This experience plays a crucial role in avoiding mistakes and taking the necessary steps to close a successful deal.


• Experienced business brokers have an established network within which to advertise your business for sale. They will most probably already have a list of buyers on the lookout for a profitable business for sale. This means that as soon as you register your business with a broker, it will immediately be made visible to interested buyers. Such visibility not only increases the chances of closing a quick deal, but also relieves you of the headache of looking for the appropriate buyer.


• Business brokers are experts at negotiations. You just have to set a realistic price for your business for sale and the business broker will focus all his/her energy and resources to get that price for you.


• You can hand over the responsibility of selling a business to the business broker, which will allow you to focus totally on your business. Remember, even when you have decided to sell, the business should remain profitable.


• The business broker you hire will also know other professionals whom you will need during the sale of the business like a solicitor, a professional for business valuation, accountant etc.


• When you sign an agreement with a business broker, he/she agrees to keep the news that you are putting up your business for sale confidential. You can hence rest assured that your employees, competitors or clients will not know that you are selling your business.

After you decide to hire a business broker, the only thing you have to do is find a reputable and experienced one. When you find and hire one, you can sit back and relax, as the business broker uses his/her experience for closing a successful business for sale deal.

If you think that you can go about selling a business with ease when the time comes, think again. A lot of preparation goes into selling a business, and you have to start well in advance if you want to close a successful deal. Even if you have a business broker helping you out with the process, there are some basics that you need to take care of. The following are some of them:

One of the first questions any buyer will ask you is the reason for selling your business. A buyer might wonder: ‘If the business is good, why is he/she selling it?' You need to explain your position clearly to the buyer. Your reason for selling a business may be retirement, need for money or a change in profession. Whatever the reason is, be articulate and explain it to the buyer and business broker, so that you are on the same level as him/her.

Getting your business valued guides you very well while you are selling a business. You can go to an expert valuation firm which will value your business and help you know its worth. If you don’t know which valuation firm to use, you can consult with your business broker, who will know a reputed professional to get your business for sale valued. Knowing the value of your business will help you price the business and know your market position while selling your business.

Set a price of your business for sale on basis of your business valuation. Many sellers make the mistake of pricing their business atrociously in hopes of finding a buyer who will fall for it. You should know that buyers are becoming savvy in their research and are using business brokers from their end as well, who will know the approximate value of your business for sale. While selling a business, price it reasonably, so you are able to attract serious offers from buyers.

After selling a business, will there be anyone the new owner can consult for advice in the beginning? You should have a trustworthy person in your business, who can help the new owner settle in. Many business for sale owners offer to stay for some time after the sale, so that issues like training, consultation etc. can be taken care of easily.

Once the decision of selling a business is taken, don't ignore your core business activities. Keep focusing on routine business even when you know you are going to sell business. You can hire an experienced business broker to take care of the promotion of your business for sale, so that you can continue running your business profitably.

A business broker is going to be crucial in closing a successful deal. Business brokers know the process of selling a business properly and will be able to guide you each step of the way. Not only will a business broker have a list of people looking to buy a business, he/she will also be in touch with other professionals like valuation firms, accountants etc. whose services you may require while selling a business.

The above mentioned are only some of the steps you need to take to ensure you are well prepared for selling a business. A professional business broker will be able to guide you further in this regard.

Timing is of essence when you are selling a business. And selling your business when you are desperate is absolutely the wrong time to sell. Buyers can easily make out if there is a sense of urgency to sell a business through their interactions with sellers. If you are a business for sale owner, you may lose leverage in negotiations if you show any weakness on your part. If you want to successfully sell your business and avoid seeming desperate when negotiating, keep the following points in mind.

Business brokers are the most experienced people you can turn to if you want to sell your business successfully. You can seek advice from an experienced business broker to know what steps to take and how to act so that you can portray a strong and steady image. Expert advisors play a vital role in closing a successful business for sale deal. Ask your business broker a lot of questions and turn to him/her for advice when you think you are stuck in any situation.

Confidentiality is of utmost importance when you want to sell a business. Tell no one outside your trusted circle of family, friends and business broker that you want to sell your business. You may be tempted to tell as many people as you can that you want to sell a business, in the hope that you come across a potential buyer. However, this will also alert all your employees and customers of the potential sale of business and they may start seeking your competitor to associate with. This will, in turn, have a negative impact on your business. Consider working with an experienced business broker, who can help you maintain confidentiality related to your business for sale.

You can avoid a desperation situation for selling your business by having multiple offers on hand. For that, you need to entertain multiple buyers at the same time. Having only one interested buyer on hand puts a lot of negotiation power in that buyer’s hand, which is not good for you as a business for sale owner. An experienced business broker will have a large database of buyers which he/she can leverage to attract multiple buyers. Multiple offers will help you bargain for the best possible terms and price for selling your business.

Pricing is one issue which needs careful consideration. If you price your business too high, you may lose buyers who might have considered a fair price. On the other hand, if you are willing to sell a business for too low a price, buyers might question the profitability of the business. A fair price for your business for sale will attract more buyers than if you hike or lower your business for sale price. A business broker can also help you with business valuation, so that you can price your business reasonably.

If you are thinking of selling a business, you may be looking for a business broker who can help match you with an appropriate buyer. However, there are too many business for sale owners who have had their fingers burnt with wrong business brokers. We hence thought of listing down some red flags you should watch out for while looking for a business broker. Some of the red flags you should be aware of are as follows:

• Huge Upfront Fees

Some business for sale owners have the bitter experience of paying upfront fees to business brokers and then regretting when, after months of being listed, their business still doesn't have any valid offers. Upfront fees may be a reasonable bet when one is dealing with the world's leading business brokerage firm. However, business brokers catering to the small business category normally charge per month or set up an agreement of commission on a successful deal. When selling a business, if a business broker asks for upfront fees just start looking at other business brokers.



• Inability to Provide References

Another red flag about a business broker is his/her inability to provide a reference of past clients. References from past clients give you an idea of the methodology adapted by the broker in selling a business and the focus of the business broker in question. That too, from a seller's perspective. Feedback from past clients is an invaluable piece of information on basis of which you should decide whether to go for that business broker or not. If the business broker is unable to provide any such reference, forget him/her.



• No Reports or Updates

You need to know exactly what activity is being undertaken to sell your business. You need a business broker who actively calls prospective buyers and not someone who just posts on business for sale websites or sends out mass mailers. Ask for regular updates on who is being contacted in the form of bi-weekly reports or personal meetings so that you are in the loop. An unscrupulous business broker may waste your time unnecessarily if you are careless in your dealings with him/her. Unless and until you are aware of what is happening, selling a business is not going to happen.



• Inability to Prove Industry Experience

One must-ask question to a business broker should be: have you sold any businesses in my industry? A business for sale process closes faster if the business broker has experience in selling similar businesses. He/she will have a database of buyers if they have dealt with a similar business in the past. They will also know how to approach a buyer and have an inkling of the negotiation process. However, not a lot of brokers specialize in a particular industry. So if the broker has a lot of experience in selling a business, you might have to let go of the 'industry-experience' factor.

A business broker is the most important person you hire for your business for sale process. The value you get after selling a business is totally dependent on the business broker you hire. Keep the above-mentioned red flags in mind so that you hire the right broker for selling your business.

It is a fact that lesser deals have been made in buying or selling a business during the past year due to the recession. However, this is not due to lack of buyers in the market. There was a lot of buying interest in the past year, but many deals didn't close due to lack of financing. In this tight an economy, a buyer needs all the help he/she can get for buying a business. As a result of this, sellers who offer any kind of seller financing find it easier to sell business. If you are planning on selling a business, consider offering seller financing, as it makes it a more attractive deal for the buyer.

When you offer seller financing while selling a business, you agree to the buyer making an initial down payment and carrying a note for the rest of the purchase price. While this arrangement has always found favor with buyers, it is considered even more important in today's tight credit scenario. With seller financing, you may find it easier to sell business. However, there are some points to keep in mind when you decide to sell business with seller financing.

• Make sure you get a down payment

Many sellers make the mistake of refusing to take the down payment after offering seller financing. Even though you are confident while selling a business that it will be profitable enough for the new buyer to be able to pay you back eventually, a down payment reduces the risk that you face in the future.

• Assess the risks

Seller financing is nothing but an investment you are making. And like most investments, it has its risks. After an agreement has been entered into while selling a business, you need to wait patiently while the buyer develops the business, makes profit and returns the rest of the amount back to you. Profitability under the new owner is also not guaranteed, and you might end up making a loss if the new owner is not a sound businessman. Take into consideration all this before you sell business, as you need to be ready to tackle difficulties which may arise in the future.

• Get professional assistance

A business deal always has a lot of complications which you might not be able to handle alone. Selling a business requires the help of professionals like business brokers, who are experts at documentation associated with selling a business. If you are also offering seller financing, you may require legal and financial advisors to ensure that the paperwork is impeccable and there are no complications after you sell business.

• Use financing to your advantage

You may think that offering seller financing is one way of selling a business easily. However, seller financing may also turn out advantageous for you in the long run. Not only may it help you find a buyer for your business for sale easily, it may also allow you to sell business for more than its valuation. A buyer may be willing to pay a bit more if a seller is offering seller financing in times of tight credit situations.

There is no one-size-fits-all solution when you are selling a business. In case you have doubts on whether you should offer financing for selling your business, you should take advice from a person who has already sold a business with seller financing. That way, you can ask relevant questions relating to your situation and then decide whether it is the right step for you. All said and done, the final decision will be completely yours. But be sure to check all avenues related to seller financing before you sell business, so that you don't miss out on any advantages it could offer you.