Why You Should Use a Broker When Selling Your Business
Many business owners eventually reach the point where they decide it’s time to sell their business. If you’re looking to sell, you may wonder how to begin the process. First and foremost, it is strongly recommended that you find yourself a broker to help make the process go smoother.
Know the Value of Your Business
One of the main determinants of a successful sale of your business is its valuation. Overvaluing or undervaluing your business can negatively affect your sale. A good broker has the resources and real-world experience to accurately evaluate a business. The unbiased valuation provided by your broker is based on your business’s financial performance, employee structure, income, and more.
After the initial valuation, a broker can help you understand what factors may be driving down your business’s valuation and what factors will be crucial to highlight when selling your business. Armed with this knowledge, adjustments can be made to increase your business’s valuation. This in turn will allow you to raise the price of your business.
Find a Buyer
As you know, successful business deals depend on the size and health of your network. Your network has been built around selling your business’s product or service. While that is great for the success of your business, that network will not be effective for selling your business. So, even though you may know some potential buyers, if you rely on your own network, you will likely end up selling yourself short.
Finding the right buyer for your business is key. You want to find someone who will offer you a fair price, as well as continue to run your business well after you sell it. Your broker has the marketing know-how and network to help you find the right buyer. They can screen potential buyers based on several factors. For example, they can prioritize finding a buyer who has the proper funds to buy your business. Doing this can reduce the risk of a buyer dropping out before closing. Your broker can also help you find multiple prospective buyers and potentially bid up the price.
Facilitate the Sale
The process of selling a business can be long and complicated. You aren’t expected to know everything; fortunately, a good broker has been through many deals and can help you through the process.
During the selling process, a primary concern for many business owners is confidentiality. If rumors about an upcoming sale start spreading, that can impact your business. On your own, maintaining confidentiality can be difficult. However, a broker can help you maintain confidentiality by preparing a confidential business review that is provided to prospective buyers only after they have signed a Non-Disclosure Agreement. This is just one of many ways that your broker will work with both you and the buyer to help the sale close successfully.
Selling your business is a big step. You will want to make sure you have the right team on your side. Working with a business broker will allow you to have a smoother experience. With their help, you can make sure everything is done properly.
Are you selling your business? Click here to learn more about Lighthouse Business Broker and how they ensure a successful sale.