Selling Your Business – How a Business Broker Can Help You Get A Better Price

Business brokers can help you get a better buyer and a higher price for your business.

I get a lot of questions about what business brokers do; when to use them and how to select one. So let’s start at the beginning. What does a business broker do for a business owner?

There are some very important things that a business owner cannot do on their own during the business sale cycle that a business broker can do.

Selling your business is a very complicated process and we like to think of ourselves as guides through the jungle. You would never try to go up the Amazon River by yourself. You want someone alongside that’s done this before.

So there are several things you want to do before the process. First, you want to maintain confidentiality. You don’t want to tell your employees or your vendors. You don’t want your competition to know. So a business broker can help you do that.

The other thing you must do during the process is continue to run your business. You don’t want to pay much attention to the sales process. You want someone else to handle it for you.

The day before a closing, the banks and the buyer will ask for the last month’s financials. And if, for some reason, you’ve been distracted or you haven’t kept your eye on the ball, and business goes down, guess what? They’re going to want to renegotiate.

And that brings me to my next point: negotiating. It’s very important to have someone negotiate on your behalf.

Pro athletes, entertainers, people who are having large transactions or are worth a lot of money understand they cannot negotiate for themselves. So they hire someone to do it for them, a pro.

A lot of times on the buy side, if your company is being bought by another company or being bought by someone who’s done this before, they’re pros.

Most business owners are not pros in negotiation or not pros in selling. And they don’t know all the things that go into it. So you want someone to be able to negotiate on your behalf. Your business broker would do that.

This is not a time for a do it yourself attitude.

And the second thing you’re going to want to do is make sure that you get the right buyer at the best price.

The only way to do that is to have competition. So you want to create competition for your deal. You can’t do that sitting in your office by yourself.

We do two things at Transworld. We network the sale through fellow professionals through our associations like the IBBA and the BBF, which is the Business Brokers of Florida.

So not only am I working on selling your business, the 90 brokers at Transworld, the thousands of brokers of IBBA are all working hard to sell your business, so that creates competition.

And the other thing you want to do is put it out there in the marketplace and all the websites; and there’s no way that an individual can join all the websites and have all the buyer flow that a business broker has.

So that creates competition for your deal, too. And that really gets it to the right price.

Business owners already have a full time and a half job, and to try to take that on is too much. I know they can bring in other kinds of advisers, but when you talk about the power of networking, it really counts.

And even beyond that, say that I found the right buyer.

We have a saying: “If you have one buyer that buyer has you”.

So the right buyer came through your door and you weren’t even looking to sell and all of a sudden this big public company comes through your door and says “We want to buy you”. Well, great, you’ve got the right buyer. And they’re willing to give you your price.

But people don’t understand that 50 percent of selling your business is finding the right buyer. The other 50 percent is getting yourself through the transaction. Renegotiations happen, sometimes even after closing.

There’s dealing with lawyers, accountants, bankers, landlords, competitors, vendors, employees, and there’s all those issues that a business broker has been through before.