Selling Your Company? Consider Using a Business Broker
You know how to sell your product or service, but when it comes to selling your business itself, it generally is wise to seek professional help.
Selling your life's work is understandably emotional, but such sentiments can work against you during a sale. A business broker, serving as an intermediary between buyers and sellers, can navigate the complicated process, helping you achieve your financial sale goal while maintaining your peace of mind.
Business broker benefits
Utilizing the services of an experienced, professional business broker also allows you as owner to focus on running your business. This reduces the risk of business erosion during the sale process.
Among the services a business broker may offer during a sale are:
- Help to improve certain factors in the business before it goes to market
- Help an owner come up with a realistic value and asking price
- Protect the identity of the owner and employees
- Formulate a marketing plan for the sale
- Identify good buyers
- Help control negotiations
- Provide good referrals to other professionals such as accountants, attorneys, lenders and wealth managers
- Closing the deal
Vetting a business broker
Brokers can be a very worthwhile resource. Be aware, however, that anyone can call him- or herself a business broker.
Review a potential broker's list of recent deals and ask for references. When you speak with references, ask about the broker's level of various services. Get specific examples of how the broker helped the client. Also find out what the client wishes the broker had done differently.
Look for a broker experienced in buying and selling businesses. Examine the types of deals that the broker has closed over the last several years. Key questions to ask include:
- Did the broker's recent transactions involve businesses similar to yours; for example, service firms with similar numbers of employees and revenue?
- Is the broker experienced with your specific industry, especially if your firm is difficult to value using traditional metrics?
- Will you primarily be working with the broker you have met, or will you be mainly corresponding with a junior member of the team?
Also review credentials. There are several certifications in the business broker world. We recommend providers that have taken the time to get and maintain a certification, which usually involves education, experience and ethics components.
Two designations to look for are the Certified Business Intermediary (CBI) and the Board Certified Broker (BCB). Both of these accreditations require several years' experience in the business brokerage industry, passage of a comprehensive exam, and completion of continuing education courses.
Putting as much care into selling your business as you did building it will yield the maximum value to you and your stakeholders.