Selling your business. Basic Information about brokers
What is a Business Broker and what does this have to do with selling my business.
After business owner invest many, many years in their life, establishing and growing a successful business, they come to a point where they are ready to reap the rewards of all the hard years of labour. Although at this stage, most business owners are exhausted, this is a crucial stage within the business, that is worth investing time in!
A business broker is a person or company who assists a business owner, in selling their business.
Some of the things that business brokers assist with include:
Establishing what the value of your business is . It's important that you gain a solid understanding of the market value of your business, so you don't waste time trying to sell at an unrealistic amount. Or, on the other hand, sell your business for less than it's really worth.
Finding the right buyer for the particular business . A suitable buyer must posess the necessary skills to run the business and also have adequite capital for the acquisition, be able to fit in with your company ulture and business values and so forth.
Walking both business parties (business seller and business buyer) through the transaction. This includes assisting in planning, meeting both parties, assist with negotiating, and also in the final changeover. There are always questions to be answered along the way.
How do business brokers get paid, and how much do the cost? Do they charge a percentage commision?
Business brokers get paid when a business gets sold. They charge a commission for their services on the sale price (similar to a real estate agent). For example, if a business is sold for $900,000, there may be a $90,000 commission charged to the seller. The average business broker charges 10-12% of the sale price
Why would a seller pay a business broker when they can sell the business themselves?
It's hard enough in today's world for a business owner to run their business without having to sell business. The last thing a business owner wants to be doing is showing their business to anyone whol walks through the door! - people who have no money, people who are just interested in value, perhaps even competitors who simply want to see what's going on. This is where a business broker comes in, and is helpful when it comes to businesses for sale.
Business brokers help to put a propper value on a business, and to also filter the buyers to ensure they are genuinly honest, that they have the money to buy the business, and that they have the propper background to make the business successful.