If you want to sell a business, you may be considering using a business broker. Unless you’ve sold companies before, you are likely to need professional help. Finding the best business brokers for selling your LLC is important since it could mean thousands of dollars in differences. In this article, we are going to talk about how a business broker helps to sell a business.
Preparing to Sell Your Business
If you want to have a successful sale of your business, you need to prepare well ahead of time. If you sell your business on the fly, you are not likely to get the best price for your business. Since potential buyers are going to want to see three years of financials, you need to make sure your records are in order and attractive. The sooner you get started on your business exit strategy, the sooner you will be able to execute it successfully. A business broker can help you achieve your sale goals and here is how.
What a Business Broker Does for You
A business broker can help you streamline processes for selling your business. Since this is such an important decision, you need to pay close attention to the process and having a business broker will help you. Business brokers have special training and experience helping people buy and sell businesses. They help to provide guidance, advice and other necessary resources that are needed to make the transaction happen.
The connections a business broker has is another thing that makes them valuable. They are likely to have relationships with finance professionals, attorneys, accountants and other people that are needed. Business brokers can put together your marketing package and help with determining the price to put the business on the market for. The biggest benefit of having a business broker is that business owners can stay focused on running the business, so it doesn’t slide while they are trying to sell it.
Most business brokers work for commission around 10 percent of the price of the sale, but this can vary depending on the broker. As the seller, you are usually the one that is going to pay the broker’s commission.
Finding the Right Business Broker
Just as with any other profession, there are good brokers and some that aren’t so good. Before you decide whom to hire, you should speak with three to four broker and see which one would be the best fit for your project. Always make sure to meet with them face to face so you can get a true feel for what they are like. Ask them questions about their experience, rates, and connections.
Don’t be afraid to ask for references of people that have sold their businesses through this broker. If they are a good broker, they are sure to have references that are more than happy to share their good experience with another potential client.
Look over their resume and credentials to see if you pick up on anything that you have questions about. You should see how long they’ve been a broker if they have professional certifications if they specialize in a certain industry and how many transactions they have done while being a business broker.
Preparing for the Sale of Your Business
When you are working with a business broker, they are going to help you prepare for the sale of your business. Make sure you sell well before you are desperate to make the sale. Many times people wait until the business owner is either ill or feels they are too old to run the business, but that is too late. Getting a head start on the planning of your business sale will allow you to be in the best position possible for the sale.
If you sell your business at the wrong time, like when you are desperate, potential buyers are likely to sense the desperation. If potential buyers sense desperate, they are likely to use your desperation as leverage so they can get a better price on your business. If you are stable, your business is stable, and they can’t sense any desperation, they are likely to see they don’t have much room to ask for favors.
All of your records should be in order before you try to sell your business. If your financials are confusing and you have to keep explaining away transactions, you may make your buyers nervous. Speak with your CFO and accountant about what needs to be done to normalize your financials so when you go to sell; there aren’t going to be a lot of questions.
When you decide to sell your business, you should think about it as a marathon instead of a sprint. Selling your business to the right buyer is important, and that is going to take some time. You need to qualify the buyers and make sure they are the right person for the sale, and that can’t be done overnight.
Understanding how a business broker helps you sell your business is important. The more you understand about the process, the better you can work with your broker to get the best price and best buyer for your business. Your broker will work to help you keep emotions out of the business transaction so you can get the money that you deserve out of your sale.