What a Business Broker Can Do for You
Buying or selling your business is not something that you do every day, and you will likely need some guidance to do so. While a real estate agent may be able to value your property and help you sell that, when it comes to selling a business, they simply don’t have the specialized knowledge needed.
The primary role a business broker plays is that of an educator. The broker educates both buyers and sellers about what it takes to buy and sell a business and get the most out of it. How does this work? Here are a few of the primary things that a business broker does for you.
Buyer: Financial Qualification
Unless you’re paying cash for your business, you will need to have some kind of financing and you will need to qualify for that financing. Much like buying a home, if you are already pre-qualified for a certain amount of money, the buying process will be much easier for you. Once you have done your due diligence, and the lender is satisfied that the business is a sound investment, your funding will be available.
This also gives you an idea of what kind of businesses you should be looking at and what you are qualified to purchase. That way you are not aiming way over budget.
Buyer: Requirements for Acquisition
Besides being financially qualified, some businesses have additional requirements for acquisition. For example, to purchase a medical practice in many states, you will have to be a licensed physician. If you are going to do certain types of contract work, you will need to be certified, and to own a restaurant, sometimes you will need permits and licenses that cannot be transferred from one owner to another.
No matter what type of business you are looking at, a good business broker will make sure you meet all the specific requirements for business acquisition or are prepared to meet them once you make a final purchase.
Seller: Marketing Your Business
Just like selling to customers, you can’t effectively sell your business unless you market it effectively. This means that you need to have a marketing plan. However, marketing your business effectively is much different than marketing your products and means more than hanging a sign outside the front door.
You’ll need to market to buyers that are qualified and have the right requirements in place to acquire your business. These are things a business broker does anyway for buyers, and they can help make the right introductions for you.
Seller: Business Valuation
What is your business really worth? You can’t just pick a number out of a hat, but instead you need to know for sure what you can reasonably sell your business for. This means a lot of analysis of assets, profit and loss statements, income projections, and the projected state of your industry.
Sound complicated? It can be, but a business broker can make it simpler by showing you steps you need to take, getting your records in order, and coming up with a true valuation of your business and your assets.
Developing a Business Information Package
One thing prospective buyers will want almost every time from you is a business information package. This package will include your business valuation and how you arrived at it, projected income, industry projections, and general information about your customer base, your products or services, and more.
This package is what will help the buyer make a good decision and is a part of marketing your business effectively. A business broker will help you make this information package compelling and appealing, while being truly educational as well.
Saving Both Parties Money and Time
When buying or selling a business, it is easy to waste time and money on unnecessary steps or exploring opportunities that just won’t ever work for you and your budget. As a buyer, it is easy to waste money on the wrong kind of valuations or providing additional information to someone who is not yet ready to make a purchase or is not even qualified to do so.
A business broker helps you sort through all of these things and save you from extra work and expense that will never pay off for you. Buyers and sellers alike will be better served by employing one.
Are you buying or selling your business, or even just thinking about it? Do you want more information about what a business broker can do for you? Contact us here at Rogerson Business Servicesfor more information. We’ll do our best to answer any questions you may have.