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Selling a business can be a daunting task; it’s a long and often tedious process. If you try to do it without the help of a business broker, it shifts your attention away from running the business, something that could hurt your bottom line.
Why You Need a Broker to Sell Your Business
Whether it’s marketing, documentation, screening potential buyers, or navigating due-diligence, it can be extremely difficult to manage a business sale without the help of a professional. The benefits of using a broker to sell your business are numerous; here are 6 of them:
To keep your employees, customers, and competitors from knowing that you’re selling your business, you need the help of a professional. It can be hard to keep a business sale confidential if you’re representing yourself. Business brokers are the best people to lead sale negotiations without the word getting out.
A business broker can help keep the sale private by concealing the exact name and location of your company. And before providing the real information to the potential buyers he will have them sign an NDA. This screens out unqualified buyers and prohibits those who signed the agreement from spreading the word.
2. Multiple Buyers
A business broker can help you make the most of your time by only working with qualified buyers. Having talked to many prospective buyers, a broker has the experience and knowledge to determine which buyer is most likely to show interest in your type of business and to buy a business. Business brokers also have a database of interested buyers, making it much easier and faster to sell a business.
Business broker’s can also secure interest from multiple buyers who are willing to make an offer for your business. This creates “buyer tension” and can help with competition drive up the ultimate sales price for your business.
Business brokers are known for their compelling negotiating skills which go a long way in getting sellers the best deals. Negotiation is one area that makes using a business broker a worthwhile investment. If you’re not good at negotiating, you should hire a professional to navigate that for you so you can focus on running your business.
With a huge network of contacts within the lending industry, business brokers can help facilitate deals. Some private lenders, local banks, and SBA lenders work closely with business brokers, which help in finding buyer financing.
Business brokers can also conduct sell side due diligence in advance of marketing your business, anticipating what documentation buyers, banks, SBA lenders and other interested parties will request when they are conducting their due diligence to determine if they’d like to make an offer for the business. This is a very valuable service that helps identify potential problems with the documentation early in the process so that it can be corrected or enhanced prior to anyone else seeing it.
The last thing a business owner wants to do is turn away a prospective buyer because of a documentation issue that could have been easily addressed earlier in the process.
5. Buyer Qualification
The screening of prospective buyers ensures that deals get done on time. Business brokers employ several techniques to weed out the deadbeat buyers; these may include obtaining documents such financial statements, credit reports, and interviewing prospects.
Both the buyer and seller benefit from a fair price. Without previous experience of selling a business, it can be difficult to figure out what a business is worth. Business brokers have the expertise and can help with valuation. Some business brokers also work with local valuation experts to help determine the value of a property in a particular area.
Brokers are also skilled at helping the owner arrive at the right price for their business, which is an art and a science. The price that the seller goes to market sets a benchmark for negotiation, and presenting a selling price that is too high or too low can open up negotiations on price.
Is Selling Your Business Without A Broker A Good Idea?
Before taking the DIY route, keep in mind that the process will be long and arduous. It will require a lot of your time and you will have to do the work that a broker will normally do, things like marketing, price negotiation, and business appraisal. Financial and legal paperwork will also be handled by you, which can be daunting — you may need an attorney or accountant for that.
Here are some situations where you may not need to hire a broker:
1. If you have found a buyer and negotiated a price, and you’re not concerned about maximizing profits.
2. If you’re selling your business to a person you know, for example, your friend or employee, you probably don’t need a broker, but it’s highly recommended to hire a lawyer to take a look at the contract.
3. If the business you’re selling has a net profit of less than $150,000, you should sell it yourself to save costs. To accelerate the sale process, you may need to consult with an expert. Expert guidance will go a long way in ensuring that you get the most value from your sale.
You can also enroll in a DIY course at https://www.sellbyownerprogram.com. The program offers two courses — Prepare My Business and Sell My Business — which teach business owners how to prepare their businesses for sale. The program has helped over nine thousand business owners, visit the site for more info.
However, if you’re selling a business with a net profit of more than $150,000, it’s critical to partner with a business broker, like Raincatcher, to ensure you make maximum value at sale and find the ideal buyer.
Raincatcher is one of the leading business brokers in the US. With over 30 years of history and thousands of clients served, you can maximize gains by partnering with us. Inc Magazine also named us the top business brokers in the country.
Studies have shown that brokers add at least 10 percent to the sales price and better deal terms. While there are times when selling your business yourself makes sense, you are better off hiring a broker to handle things like marketing, valuation and documentation.
Not sure what your business is worth, Raincatcher can help with that as well. Visit https://raincatcher.com/valuation/ to complete the valuation form and start the process today.
Top Business Brokers In The US
Jason is a business broker who has helped tons of entrepreneurs and business owners find and succeed at their dream businesses. With over 10 years of experience in real estate sales and development industries, Jason knows what it takes to successfully close business deals.
Jason is a licensed real estate broker and has worked with both big corporations and small businesses and negotiated contracts worth millions of dollars during his professional career.
Jason graduated from the University of North Carolina with a bachelor degree and the University of Colorado with a Masters in Business Administration.
Jude is a corporate attorney and investment banker; he’s involved in a wide variety of areas including corporate development through organic growth, strategic planning, business consulting, acquisition integration, merger & acquisition negotiation, and many other venture structures and partnership.
Jude was a corporate merger and acquisition attorney for more than six years before transitioning into acquisition advisory brokerage.
With experience in business development, consulting management, and corporate development, Jude’s career has been about driving change, consulting for consultants, advising advisers, and providing strategic management advice to managers and business owners.
Jude has won many awards and accolades and played critical roles in acquisitions worth billions of dollars during his professional career.
Jude graduated from Louisiana State University with a degree in finance and holds a Juris Doctorate, a Diploma of Comparative Law and a Master of Business Administration Degree.
Mark is a business consultant with years of experience in the brokerage industry. From tech startups to Fortune 100 consulting companies, Mark has got the business savviness to deliver results in industries and organization of all sizes.
As a business broker, Mark is passionate about helping business owners navigate the sale process to maximize value. Mark graduated from Loyola University Chicago with a degree in Economics. When Mark is not closing the deals, he can be found enjoying outdoor activities in Denver where he resides with his family.
Keith is a managing broker at Raincatcher. He has over 20 years of experience in brokerage and has overseen more than $800 million in contracts for seller and buyers. Keith was involved in the formation of several startup companies including Marble Distilling Company, Timbers Resorts, LLC, and Pinnacle Associates, Inc., a valuation firm based in Ohio. Keith graduated from the Ohio State University with a finance degree.
Tim is an associate broker at Raincatcher. Coming from a sales background, Tim is passionate about helping business owners achieve their goals in selling their businesses.
Tim first developed this passion while leading mission work in Honduras, Kenya and the Dominican Republic. He also spent time as a medical school student working with patients, before leaving in his third year to pursue entrepreneurial endeavors. Tim is currently expanding his learning while pursuing an MBA with the Kelley School of Business at Indiana University.
Chase Kenner is an Associate Broker with Raincatcher and a CERTIFIED FINANCIAL PLANNER™. Chase has over a decade of experience assisting business owners achieve financial peace of mind. Before joining Raincatcher, he served as Director of Financial Planning and Head of Research to a wealth management firm that provides services to hundreds of families with assets totaling more than $1B. Chase also served on the firm’s buyer-side M&A management team where he was responsible for coordinating the operations and integration process resulting from the acquisitions of other financial firms in need of a succession plan.
Sell Your Business for Maximum Value With a Business Broker
Selling a business requires skills and knowledge that most business owners don’t possess. If you’re not a savvy negotiator, taking the DIY route would eat into your profits, perhaps gobbling them up entirely. It’s best to hire professionals to help you navigate the sale process. That way you can save time, energy, and more importantly, money.