What is a Business Broker?
- Posted By Jenny Chellew
What is a Business Broker?
A business broker can provide you with an extraordinary amount of value if you’re looking to buy or sell a business. Whether you’re looking to purchase a new opportunity or part with your beloved business, you may need to be prepared for a bumpy ride.
There are a vast number of considerations when buying and selling a business; from valuing the business assets and determining the right purchase criteria, developing a strategic marketing plan if selling, to negotiating the sale and ensuring your rights are protected.
A business broker will be able to help you navigate the twists and turns in the road and allow you to step back from what can be an incredibly emotional ride.
Below, we’ll look at exactly what a business broker is, why you should consider working with one and how they are different from other professionals such as a real estate agent.
A business broker is a person or company that helps you buy or sell a business. They act as your mouthpiece, bargaining agent and will work to negotiate and close your deal.
If you’re selling a business, a business broker will:
- determine an ‘appropriate selling range’ for your business i.e., advise you on what is a reasonable price for your company based on market comparables
- develop the strategy to secure the best possible price
- find not just any buyer but the right buyer who will pay you a fair and reasonable price for your business
- explain the legalities and paperwork involved (there are many) and how solicitors and accountants will come to interact with your transaction
- negotiate with a buyer (who may have their own broker) and close your deal
If you’re buying a business, a business broker will:
- help you develop your long-term goals when buying a business (and help you work out what you, ultimately, want to achieve through a purchase)
- present you with the suitable range of businesses that fit with your investment criteria
- explain the legalities involved when buying a business and how solicitors and accountants will come to advise you on various matters
- negotiate with a seller (who may be using a business broker) to close your deal
Ultimately, a good business broker must have excellent communication and interpersonal skills and meticulous attention to detail. Business deals are personal transactions, so good people skills are a must.
Your broker should also have a solid amount of experience under their belt. Negotiating complex business transactions can get tricky and is no easy feat for the uninitiated.
Why should I use a business broker?
You should use a business broker to ensure you secure the best possible outcome that you can when buying or selling a business.
There are a ton of factors at play in a transaction and you do not want to risk a setback that could be easily avoided. Being guided by an experienced professional will ensure that you achieve your goals swiftly, efficiently and with minimal frustration and anxiety.
Some of the benefits of using a broker include:
Experience. You may have limited or no experience in business transactions and you may not understand how the sales process works. It’s important to get expert guidance from someone who does it every day.
Objectivity. Whether you’re a buyer or seller, transactions can get emotional. One mishap in communication can lead to a deal falling apart. An independent third party will help bring calm and reason into the process, ensuring the best result possible.
Marketing. An experienced broker will be a master at marketing. If you’re selling, a broker will know precisely how to find the right buyer who is willing and able to purchase your business.
Nailing the paperwork. There’s a lot of paper involved in a transaction and a good broker will have a keen eye for detail, so nothing gets overlooked.
Better Business Brokers is located in the beautiful township of Bright and are specialists in buying and selling accommodation, tourism and country-based businesses across North East Victoria. We’ve had years of experience helping both companies and individuals sell their businesses and we look forward to helping you to.
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Jenny Chellew is an accredited Business Broker who loves helping business owners realise their dreams.