Your Business Sold

What is a business broker

what services are provided?

What are the different types of business broker? – Why does it matter?

It is important that you check thoroughly how your selected business brokers undertake their role, what their size and scale is (big is not necessarily beautiful in this case) and what fees they charge.

Some brokers simply rely on advertising businesses in e.g. the Sunday Press and on the Internet and therefore are dependent on buyers being attracted to the adverts. When responses are received they pass on your details to the prospective buyer and effectively push most of the burden back to you to negotiate a deal.

Other brokers are far more proactive, understanding that as a client you expect them to manage every stage of the process and to add value by pro-actively finding buyers through their own marketing activities.

Brokers may be larger national firms or smaller independent companies. Bear in mind that the higher the cost base of a broker the larger the fee is likely to be and the less intimate the relationship with the clients. Brokers employing staff have to ensure that salaries are met and therefore there will be a natural tendency to place emphasis on up front fees as in the event that they are unable to sell your company or it takes longer than expected the broker still has to meet his costs. This is not the case with independent or boutique brokers.

It is also true that a smaller broker working on a self employed basis will be more selective about the businesses taken on. This is because unless there is a high degree of confidence in the ability to find a buyer for your business then the broker runs the risk of not earning a fee.

Selecting the right business broker for you matters because you are entrusting potentially the biggest transaction of your life with a comparative stranger.

You therefore need to know:

• That you trust them and the methods to be used
• That you can strike up good professional relationship
• That you understand the job to be carried out by the broker (passive or procactive) and you have expectations of finding a buyer
• That the fees you are paying are fair for the ‘job to be done’
• That the broker is focusing on your case and that you are not simply one of many cases being handled
• That your broker understands your valuation and is working to secure the maximum value for your business
• That the broker will manage relationships with other professionals e.g. lawyers and accountants

What do I need to know about selling my business? How can I avoid common mistakes?

It is important to understand:

• What your options are
• What is a business broker?
• What are the different types of broker? <<
• What do business brokers charge?
• How much is your business worth?
• Should you go it alone?
• How does advertising work?
• What should I pay to advertise?
• Do’s and Don’ts, common mistakes made when selling a business
• How do you get maximum value?
• What is an exit strategy?