Selling a business is tough.

It’s not just about finding a buyer; it’s about getting the right price, handling the paperwork, and keeping things confidential. A good business broker can give you a smoother and more profitable exit.

What Exactly Does a Business Broker Do?

Think of them as your business selling coach. A good business broker will know the market, understand valuations, and have the connections to match sellers with the right buyers. They are the professionals who should help you manage communications with prospective buyers, allowing you to keep your focus on running your business until a deal is finalized.

The Core Duties of a Business Broker

1. Creating the Valuation:
One of the first steps to selling your business is figuring out what it’s worth. Brokers use a blend of financial analysis, market comparisons, and asset evaluations to set a fair market price. This makes your business more appealing to potential buyers who want to know they are paying a fair price.

2. Prepping for the Sale:
Selling a business isn’t just a “For Sale” sign on the window. Brokers help you clean up your financials, spot areas to boost value, and handle details you may have overlooked in the sale of your business.

3. Marketing:
Your broker shouldn’t just rely on BizBuySell ads. They should tap into their network of connections to discreetly market your business. No leaks, no awkward conversations with employees or competitors.

4. Negotiation:
Negotiations on a business sale are an art. The goal is to maximize your purchase price, but it is crucial to keep it within a reasonable range. While it might seem counterintuitive, you actually want the buyer to succeed. If the price is set too high, the buyer may struggle to maintain the business, leading to potential issues down the line. A fair deal increases the chances of a smooth transition and long-term success for everyone involved.

Further, you may be asked to give provide financing for deal. You should talk to your broker about securing upfront payment if possible.

Another consideration is whether the buyer will opt for an asset purchase or a stock purchase. Most buyers prefer an asset purchase, as it provides them with more control and fewer liabilities. Stock sales, on the other hand, are relatively uncommon.

5. Navigating Due Diligence:
Once an offer is made, the sale moves into due diligence—the buyer’s in-depth evaluation of your business. A reliable broker coordinates this process, addresses any obstacles, and helps navigate the legal, financial, and administrative complexities to ensure everything stays on course.

What an Experienced Business Broker Should Offer

Confidentiality:
Loose lips sink deals. A broker can ensure that sensitive details stay under wraps, shared only with serious buyers.

Experience Matters:
Selling a business involves numerous legal, financial, and operational challenges. Alongside your lawyer and accountant, an experienced broker can help navigate these complexities to ensure a smoother process.

Negotiation Skills:
When interviewing a business broker, it is essential to gauge their negotiation skills to ensure they can handle high-stakes discussions effectively. Ask about their experience in closing similar deals, how they approach negotiations, and their strategies for handling tough buyers. Inquire about specific examples where they have successfully navigated complex negotiations. Also, evaluate their communication style—strong negotiators are clear, assertive, and adaptable.

Time Management:
You have a business to run, and letting a broker handle the sale allows you to focus on what you do best until it’s time to hand over the keys. Just make sure the broker is detail-oriented and readily accessible throughout the process.

Caution Before Signing Agreement:

Even if you have the best broker in the world, it is crucial to have your business lawyer review the agreement before you sign. If you skip this step and sign the offer, the basic terms of the sale are set in stone. While your lawyer can still assist with the legal language in the final contract, changing the core terms at that stage is extremely difficult.

The Bottom Line

Selling your business is a major move. Having a broker on your side can be the difference between a stressful ordeal and a smooth, profitable transition. Choose wisely, and you’ll unlock the door to your next chapter with confidence.