7 Reasons Why You Should Use A Business Broker
The COVID-19 pandemic has made business management more challenging. As McKinsey points out, businesses must be leaner and respond to change faster. Success requires resilience, and the ability to pivot when circumstances change.
The pandemic has also made selling a business more complicated. Companies in many industries have changed their business models to survive during the pandemic, and explaining your value proposition may be a challenge.
Find an experienced business broker to advise you throughout the sale process. Here are seven reasons why you should hire a business broker:
1. Increase Business Value Before a Sale
A broker can help you increase the value of your business before a sale. If you make improvements, you can make a stronger case for selling your business at an attractive price.
Gather Data and Solve Problems
Start by talking with your customers. Use online surveys, details from customer support calls, and in-store conversations to gather feedback. Determine who your ideal customer is, and ensure that your business serves the ideal customer.
Find out what problems your clients are trying to solve, and create products and services to solve more problems.
These steps can increase customer loyalty, and generate repeat business. The Harvard Business Review explains why developing repeat business is so profitable: “Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.”
You can increase sales and control your marketing cost with repeat business.
Review Your Operations
Create a better customer experience by improving your website and your eCommerce system. Make it easy for customers to navigate your website and to buy products online. Automate all routine tasks, and write a procedures manual to document each process.
You can save time by working with a broker who can identify areas of needed improvement. Your job is to manage your business effectively and increase profits, while the business broker positions the company for sale.
2. Uncover Your Value Proposition
The broker can help you create a marketing strategy to find interested buyers, including an executive summary that presents your business in the best possible light. When multiple buyers compete to purchase your business, you can obtain a higher sale price.
Brokers understand what buyers are looking for in a business:
A business with uniqueness in the market
Firms with a track record of sales, positive cash inflows, and net profits
Companies with recurring revenue streams
A profitable niche that is repeatable over time
A disruptive product or service that grows profits
Work with a broker who can educate buyers on why your business is attractive. If you can provide a business model that a buyer can use to scale the business, you can close a sale at a higher price.
3. Obtain a Certified Business Valuation
A broker can help you obtain a certified business valuation, which is prepared by a certified, accredited valuation appraiser. The appraiser analyzes data and reports on your business financials.
Buyers prefer certified business valuations, because the process is unbiased and reflects the company’s true worth. The broker can negotiate the sale price using the appraisal and other factors that impact company value.
Your broker will analyze the sales of similar companies, industry trends, and market factors. Their goal is to ensure that the seller does not leave money on the table.
4. Find Interested Buyers
The brokers at Raincatcher use 27 unique sources to find buyers, and the firm develops a curated list of thousands of potential buyers. They pre-screen buyers to determine if the buyer has the financial resources to make a purchase offer.
When a serious buyer is identified, your broker will manage the due diligence process.
5. Overseeing Due Diligence
Brokers know which documents are most relevant for due diligence, and your broker can help you gather and organize important documents. Requests for additional information can be frustrating, and you can hand off that task to your broker.
6. Closing a Successful Sale
The broker will negotiate the final price on your behalf, and address the laws, regulations, permits, and licenses that impact the sale.
Your broker can help create a closing and transition checklist, which will help the buyer and close a successful transaction. An experienced broker can guide the seller on best practices, and what to expect during the closing.
7. Maintain an Objective View
Perhaps most important, your broker is emotionally unattached from the business. The sale process can be emotional and draining for the owner, and a broker will help you maintain objectivity.
Work With a Trusted Advisor
Raincatcher’s business brokers have worked on over 9,200 transactions in a number of industries. They will work to transform your business into a ready-to-sell enterprise, which increases market valuation. Your broker will help you find the ideal buyer and get maximum value for your business.
Contact a broker at Raincatcher today for a free valuation.
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