Business Brokers: Their Importance To Business Buyers & Sellers
As many businesses change their owners at some point, the services of business brokers can be necessary and highly valuable both from the business buyers and sellers perspective. A person who is aiming to buy a business will need to evaluate the particular establishment and an experienced business broker can offer priceless assistance in this area; conversely, a seller may find it rewarding to hire a business for sale broker to help advertise the offer and facilitate the negotiations with potential buyers.
Business For Sale Brokers
Selling a business is an extensive, tiresome and demanding process, which can consume precious time and ultimately even damage the value of your business, as you are focusing a great deal of your energy on the sale process rather than on daily business operations. This is why services of business brokers can be invaluable.
To begin with, an experienced business broker can offer you confidentiality, ensuring that only the buyers you approve will be contacted. The broker will save you valuable time, by screening potential buyers in advance and checking whether they have enough financial resources to purchase your business, and will ensure confidentiality, by asking buyers to sign confidentiality and non-disclosure agreements. Just imagine the consequences of attempting to sell your business openly. Not only you would damage the morale of your staff, but you would also hand over a golden opportunity to your competitors, who may then spread damaging rumors or use such information to steal your customers. In contrast, a business for sale broker would be able to operate anonymously, thus protecting your business.
Second, selling your business yourself can be very inefficient. A business broker will likely have far more experience, tools and resources than you to reach potential buyers with the minimum amount of time. Furthermore, reaching buyers is just one side of the coin; getting the best price possible is another. An experienced business broker can advertise your company in a way that will attract more serious and wealthier buyers, thus increasing the benefits you would gain from selling your business.
Last, but definitely not least, business brokers can put a value on your business – since this process involves far more factors than just revenue or profit, you can seriously undervalue or overvalue your business, with both mistakes bearing significant consequences. In contrast, this is a task that an experienced business for sale broker has likely done many times before.
If you are a buyer, a business broker can prove to be of significant help as well. Most importantly, he or she will be able to show you opportunities that you may not be able to find on your own. Also, since a good business broker will likely have more experience in an industry you are interested in, you could get valuable advice and insight before moving on to more serious decisions. Researching current market conditions, prices, financing and other factors can be a daunting process; yet, a business broker would facilitate it significantly.
Certified Business Brokers
How can you know which business for sale brokers should be trusted? You will need to look at their experience and certifications. To begin with the latter, the International Association of Business Brokers is the main organization that offers certification opportunities for business brokers. In addition, certified business brokers usually have at least one of the following designations: Accredited in Business Valuation (ABV), Accredited Senior Appraiser in Business Valuation (ASA-BV), Certified Business Appraiser (CBA), or Certified Valuation Analyst (CVA).
However, while certification is usually a positive sign that a particular business broker is probably a good choice for you, it does not guarantee that he or she is competent enough. You need to pay more attention to the practical experience of the broker. How many business for sale deals has he or she already closed successfully? Does he or she have experience in the industry you are interested in? There are many ways how an insightful business broker can benefit from experience gained, for instance, establishing important relationships and learning from past mistakes – no degree of certification can compensate such advantages.
Therefore, while certification is a nice bonus, you should always focus on choosing an experienced business for sale broker, as he or she will likely have experience and knowledge you would not be able to get elsewhere. Business brokers are very important to both business buyers and sellers, as their services are often irreplaceable. Dont you agree?