A broker is a separate legal entity or individual who carries out intermediary stock exchange operations and receives a certain percentage for this. Business brokers are often called agencies or companies that sell ready-made businesses. Need to find one? Contact Websiteclosers online service – it has a really huge variety of brokers to sell your business as fast as possible.
What does a business broker do?
Acting as an intermediary, the broker acts in the interests of the transaction. He looks for a business for sale with or without specific requests, makes a preliminary assessment of it, and fully accompanies buying and selling a business process in negotiations and legal matters.
What is the broker’s fee?
The broker receives a fee in the form of a percentage of the transaction upon completion.
Role of a business broker in selling a business
A business broker works in two directions – in the ready-made business market and in the mergers and acquisitions market. The ready-made business market allows you to purchase a business worth up to one million US dollars. Transactions higher than the above amount are classified as mergers and acquisitions.
Business broker services for selling a small business
Transaction support by a broker occurs in several general stages:
- preliminary business assessment;
- mutual decision of the seller and buyer about the need to complete a transaction;
- preliminary agreement;
- payment of a security deposit up to 30% of the agreed price;
- familiarizing the buyer with the details of the business;
- main and final agreement.
What are the criteria for determining the preliminary value of a business?
Factors determining price for small and medium enterprises:
- payback period of the enterprise;
- costs of material and intangible resources;
- depersonalization parameters (how mobile a business is in matters of changing management);
- condition of equipment, wear and tear of equipment, reporting nuances, document flow structure;
- reputation and reliability of the enterprise.
How does pre-sale preparation of a ready-made business take place?
Duties of a business broker in a business sale are various. If the owner decides to sell an existing business and turns to a broker, then we can talk about the sequential implementation of the following stages:
- Assessment using individually selected criteria (stated above or others).
- Preparation of presentation materials justifying the rationality of the investment.
- Finding buyers using Internet channels and your own connections.
- Conducting presentation meetings and negotiations.
Then everything happens according to the transaction support scheme already described.
Who most often needs the services of business brokers?
Most often, business brokers represent the interests of sellers looking for an opportunity to profitably sell their business. However, recently the market of buyers who want to purchase a specific type of business and are willing to pay for professional support of a future transaction has also become more active. Benefits of using a business broker to sell a business are really impressive – hire one, it’s worth it.
How to find a business broker? Choosing options
Choosing the right broker can have a significant impact on the success of the transaction. Let’s consider the criteria that you should pay attention to when choosing.
Experience
Check the broker’s experience in selling businesses of your type and size. Ask about previous transactions and results of working with other clients.
Reputation
Research reviews about the broker on the Internet and find out the opinions of colleagues or acquaintances who have already worked with him.
Specialization
Choose a broker who specializes in your industry or has experience working with businesses similar to yours. This will help you find a buyer faster and more efficiently.
License and accreditation
Make sure the broker is properly licensed and accredited to operate in your country. This ensures compliance with legislation and quality standards.
Commission and terms of transaction
Check out the commission and terms of the deal offered by the broker. Make sure you agree with the proposed terms and are ready to pay for the broker’s services.
Questions for the broker
When speaking with a potential broker, ask specific questions to determine their approach to selling your business.
Sales process
Ask your broker about his strategy and methods for selling your business. Assess how knowledgeable he is about your business and the industry as a whole.
Possible obstacles
Discuss with your broker possible difficulties and problems that may arise during the sales process and how to overcome them.
Marketing and promotion
Talk about the marketing tools and channels the broker plans to use to promote your business.