Why choose a business broker
If you were to ask most people- What is a Business Broker? You would find many struggle to describe the role, so it is only natural when looking to buy or sell a business that you question whether you need a business broker at all!
A business broker is a professional who assists in the representation of the sale or purchase of a business at the negotiation or pre-sale of contract stage. The easiest way to describe the role is to think of the broker "like a Real Estate agent but for the sale of goodwill, not bricks and mortar". The sale/purchase of a business can be very complex and tricky to navigate as it is not always a visible or physical asset that can be understood without the important support of key documents and information.
When considering the sale of your business it is important, to begin with, an appraisal and price point in mind to ensure you are making the best and most informed decision for your future. Unlike the sale of the property, there currently is no pooled database of recent comparable sales to accessibly refer to as a seller. An experienced business broker from a reputable agency is able to provide you with internal data to discuss similarities, market trends and buyers expectation in order to form a current market appraisal as well as assist with a targeted and effective marketing campaign.
A business broker will also assist in recommending key documents you need to collect and organise as a seller. Did you know there are particular documents that you must provide otherwise the sale can be voided at any point? You may at first think the cost of a broker is high but legal battles and sales falling through can be a much higher cost in the long run! Ultimately the business broker won't get paid commission until you've settled on your business sale however legal bills are payable upon representation regardless of whether you settle the business sale or not.
Business Brokers can also assist a purchaser in a "Buyers Advocate" position to provide recommendations on business suitability by profiling you and your lifestyle, this ensures you make the right purchase that will have the most probable outcome of sustaining long term success and growth. A business broker is dealing with business owners every day, they know what to look for and what questions to ask. Having a business broker represent you in a purchase means it's an equal playing field negotiating up against the broker representing the sale. For a minimal cost, you can ensure all the headaches of negotiating on a business is handled for you by an expert.
With so many business brokers out there, how do you make the decision on which is best for you? Meeting with brokers is a good start but as salespeople, almost all business brokers will present well in an interview so it won't be easy to pick one based on that alone. One of the most important things to look out for when choosing a broker to work with is chemistry. If the broker makes you feel comfortable and they appear confident about your business then this will most likely be conveyed to future buyers- confidence is key! You also want to make sure your broker is honest and provides an appraisal that is supported with feedback and comparable sales data. Don't be fooled by the broker that is overquoting or saying what you want to hear. Remember future buyers won't be so mindful of your feelings and they will be honest on price. You need a business broker that is not afraid to tell you the information you have to hear.
Interested to find out more about the services a business broker can offer? Contact Absolute Business Brokers on 03 9566 7300 to book a free, no-obligation consult!