Did you know that, according to America’s SBDC Florida, there are 2.5 million small businesses in Florida? These small businesses make up 99.8% of all businesses within the state.
If you’re a small-, medium-, or large-sized business owner in Florida and you’re selling your business, you might not be sure where to get started.
After all, how can you find buyers for your business, make a large amount of money in the sale, and keep it confidential before you let your employees know?
This is where working with a business broker can make a huge difference. There are many benefits to hiring a business broker, from the fact that they manage all your paperwork to them getting you the best deal.
In this article, we’ll review what a business broker is and why you should use one. That way, you can decide if hiring one is right for you, and you can finally sell your business. Read on to learn more.
What is a Business Broker?
A business broker works as an intermediary between the seller and buyer of a business. They do this by providing you with guidance and resources so that the transaction can occur. They have connections and all the information needed to do this.
If you’re selling your business, a business broker will meet with you to discuss your goals and reasons for selling your business.
Then, they’ll come up with a marketing plan so they can sell your business, get in touch with industry contacts who might be interested in buying your business, and provide you with a narrowed-down list of interested buyers.
Why Hire a Business Broker?
Given what services business brokers provide, it is possible for you to take all these steps on your own. However, you’ll be less likely to find buyers and you might make less money from the final sale of your business. There are many benefits of a business broker.
They Have Business-Selling Skills
As someone who owns their own business, you likely have many sales skills that are quite impressive. However, you might not have much experience when it comes to selling businesses. This is a slightly different process than closing sales with customers.
A business broker has business-selling skills. These skills include knowing how much value to give your business, what paperwork is necessary, and how to market your business to potential buyers.
If you were to manage the entire process on your own, you would have to learn all these skills. But even then, you might end up selling your business for less than it’s worth or to the wrong person.
For this reason, it’s best to go with a business broker, who has all the skills you need.
They Know the Right Prices
When you’re selling your own business, figuring out how much to sell it for is a bit of a guessing game. Price it too low, and you won’t make as much as you could with the sale. Price it too high, and no one will be interested in buying it.
You might be able to get something close to the right price by doing a bit of research and seeing what businesses like yours have sold for recently. However, you still might not get the right price.
A business broker knows what prices are currently in the business-buying market.
They’ll know exactly what price your business should be sold for, getting you the most money possible while still collecting a list of reliable, potential buyers for you.
They’ll also be able to look at your business model and financials so that they can let interested buyers know not only what your business is worth now, but how it will grow in value in the future.
Once you’ve landed a sale through a business broker, you’ll feel like you were paid what you deserve for your business.
They Keep the Sale Confidential
If you represent yourself when putting your business up for sale, it’s nearly impossible for you to keep the sale confidential. As a result, you might end up creating some issues at work, with employees leaving before the sale or asking for raises or more benefits.
In addition to making the sales process more stressful, this could have a negative impact on your business.
This is the last thing you want when you’re about to sell it. Imagine what a disaster it would be if your business were to lose value right when you’re trying to convince potential buyers to buy it!
When you hire a business broker, you don’t have this problem. This is for two reasons. First of all, you won’t be risking putting your business’s reputation on the line by leading the sale yourself.
Second, business brokers have extensive experience managing sales negotiations while keeping everything confidential. They will keep everything under wraps until you’re ready to go public about the sale.
They Handle Everything for You
If you decide to manage the sale of your business yourself, this means that you’ll be distracted by it. You’ll have to be constantly doing marketing efforts, sending emails to potential buyers, and setting up meetings.
As a result, you’ll lose focus on running your business. You might even feel like you’ve checked out when it comes to running your business because you’re already moving onto the sales process.
However, this is the last thing you want to happen. Now, more than ever, you need to run your business with as much effort as you can, so it’s at its most valuable when you finally sell it.
By having a business broker manage the sale of your business, you can focus on doing your job: running your business.
They, on the other hand, can manage everything else. If there are any obstacles related to buyer challenges, financing issues, paperwork, or the transaction itself, they’ll handle it.
You will be less distracted and run your business more efficiently as a result.
They Know the Local Market
As a business owner based in Florida, you need to make connections with local buyers when selling your business. However, you may not know where to get started. A business broker, on the other hand, will know the local market.
They know about the different business buyers in the South Florida region, what industries they’re in, and who might be a right fit when it comes to buying your business.
They’ll also have awareness about different trends going on in your local market. This can help them sell your business, as they can show potential buyers how your business will grow after they have bought it.
Finally, they can put you in touch with any other industry professionals in your area if necessary, such as lawyers and bankers, who might take part in the finalization of the sale.
They Have Access to Many Resources
If one of your potential buyers needs a loan to buy your business, a business broker will know exactly which banks are currently lending small business loans. They’ll also have access to accountants who have an understanding of business financials.
Whatever information or expert opinion might be needed for the closing of your sale, a business broker will have access to it.
They Can Manage All the Paperwork
When you’re selling a business, transferring its ownership from one person to another, there’s a lot of paperwork involved. Depending on your business, this might include paperwork related to permits, taxes, licenses, and more.
If you were to complete all this paperwork yourself, you would be spending a lot of time learning exactly how to fill it out correctly. You could also end up in hot water if you don’t file everything properly.
When you hire a business broker, they can manage all the paperwork, making sure that all the i’s are dotted and the t’s are crossed.
In addition to being easier for you, you won’t make any mistakes that delay or void the sale or give you legal problems.
They Know All the Right Marketing Strategies
When you hire a business broker, they sit down with you to talk about your business, after which they put together a marketing strategy that will attract all the right buyers at the right price. They have all the right marketing strategies and tools at their disposal.
A business broker uses direct marketing, email marketing, local listing services, business brokerage listings, webpage ads, and digital marketing to get you the best price from the best buyers.
Additionally, they have a database of buyers they can reach out to.
They Know How to Negotiate
One of the most important skills a business broker has is that they know how to negotiate. Even if you’re able to get a list of interested buyers, it would be stressful to handle your negotiations yourself. You’re better off working with an expert.
A business broker knows how to provide your buyers with reasons why they should be paying for the price they’ve given your listing.
Additionally, a business broker will be able to use offers and counteroffers to negotiate for the best price.
All this will be done in a respectful manner so that you don’t end up being known as an entrepreneur in your industry who handles negotiations in a nasty manner.
Especially if you’re emotionally attached to your business, you’re better off having someone negotiate for you because they’ll be taking the personal element and stress out of the equation.
They Vet Potential Buyers
One of the trickiest elements when it comes to selling your own business is vetting potential buyers. Even if you have many interested buyers, how do you know that they’ll actually come through with the sale?
How do you know that they can actually afford to buy your business?
A business broker has made business sales many times, so they know what to look for when vetting potential buyers. They’ll ask all the right questions to all interested parties, after which they’ll put together a list for you.
In addition to making the sale more likely to go through, this also saves you time. You will end up meeting only with the most reliable, serious buyers, instead of having to have endless meetings to find the right one.
Sale Completion is More Likely
Finally, when you work with a business broker, the completion of the sale is more likely. Even though you might have many interested buyers, there are many things that get in the way, such as appraisals, financing, and buyer due diligence.
These issues can complicate the sale, and, worse, could mean that you lose the buyer you’ve spent so much time looking for.
Fortunately, a business broker makes the process more smooth, helping both parties get through all these potential complications. As a result, the sale is much more likely to go through with their help.
Need Help Finding a Business Broker?
Now that you know what a business broker is and why you should use one, you might have decided that it’s the right time to hire one. But even though you’ve made this decision, you might not be sure how to start your search.
If you need help finding a business broker, we can help. At Dolan Sales, Inc., we’re experts when it comes to business brokers. We also offer business broker services to businesses based in South Florida.
To learn more about how we can help you, contact us now.