Industry news

Why use a business broker?

The process of buying or selling a business requires dedication and the attention of a professional with the knowledge of the complete flow of a business transaction, as well as a team in place to accomplish every aspect of the transfer. Marketing and facilitating a business transfer is a full-time job! You deserve someone who will work as hard as you do. A qualified broker will save business owners and prospective buyers money by helping them avoid costly mistakes, effectively marketing the appeal of the business, and maximizing exposure to serious, qualified buyers--all with complete confidentiality.

If you are interested in selling your business and don’t know the answer to any of the questions below, you could benefit from the assistance of a professional broker (and you are not alone!)

• How do you reach qualified buyers, including possibly competitors, without disclosing your intentions to sell?
• How do you evaluate your business objectively to ensure you receive top dollar for your investment and avoid costly negotiating tactics?
• How do you prepare and provide the information a prospective buyer will require to interest him in pursuing your business in favor of other options?
• How do you arrive at the best price and terms, including the intangible and goodwill values of your business?
• How do you maximize your favorable exposure to potential offers while minimizing your potentially damaging public exposure to customers, competitors, employees, and suppliers?
• How do you market your business in all of the appropriate markets, databases, and media efficiently, effectively and confidentially?
• How do you screen and pre-qualify buyers, determine their motivations, managerial capabilities, and financial strength?
• How do you effectively sell your business, diverting significant time, effort and resources to that process, while continuing to manage your ongoing business productively?

Business owners have focused their entire lives on growing and developing their businesses and seldom know how to answer all of the questions above. That is where a professional REIV Accredited Broker can come in. The sale of your business demands a professional, just as running your business has demanded your professional attention. REIV Accredited Brokers have the expertise, tools, and professional team to market and sell your business successfully on a national basis. The objective is to protect your business investment and maximize your net after tax profit on the sale. It is to your advantage and in connection, your broker’s as well, to obtain the best possible price that a reasonable buyer will pay. REIV Accredited Brokers strive to maintain high ethical standards and communicate in an open and honest manner in all of business relationships.

What Should I Look For?

Obviously, you want to consider only those businesses that you feel comfortable owning and operating. “Price of Ownership” is an important ingredient for success. You also want to consider only those businesses that you can afford with the cash you have available. In addition the business you buy must be able to supply you with enough income after making payments on it to pay your bills.

However, you should look at a business with an eye toward what you can do with it. How you can improve it and make it more productive and profitable. There is an old adage advising hat you shouldn’t’ buy a business unless you feel you can do better than the present owner. Everyone has seen examples of a business that’s needs improvement in order to thrive, and a new owner comes In and does just that. Conversely there are also cases where a new owner takes over a very successful business and not soon after, it either closes o is sold. It all depends on you!

What Does It Take To Be Successful?

Certainly, you need adequate capital to buy the business and to make the improvements you want, along with maintaining some reserves in case things start off slowly. You will need to be willing to work hard and, in many cases to put in long hours.

Unfortunately, many of today’s buyers are not willing to do what it takes to be successful in owning a business. A business owner has to, as they say be the janitor, errand boy, employee, bookkeeper and ‘Chief dishwasher’! Too many people think they can buy a business and then just sit behind a desk and work on their business plans. Owners of small businesses must be ‘Doers’.

What Happens When I Find A Business I Want To Buy ?

When you find a business, a Business Broker will be able to answer many of your questions immediately r will research them for you. Once you get your preliminary questions answered, the typical next step is for a Broker to prepare an offer based n the price and terms you feel are appropriate. This offer will generally be subject to your approval of the actual books and records supporting the figures that have been supplied to you. The main purpose of the offer is to see if the seller is willing to accept the price and terms you offered.

There isn’t much point in continuing if you ad the seller can’t agree on price and terms. The offer is then presented to the seller who can approve it, reject it, or counter it with his or her own offer. You obviously have the decision of accepting the counter proposal from the seller or rejecting it and going on to consider other businesses.

If you and the seller agree on the price and terms, the next step is for you to do your ‘ due diligence’. The burden is on you, the buyer and no one else. You may choose to bring in other outside advisors or to do it on your own. The choice is yours. Once you have checked and approved those areas of concern, the closing documents can be prepared, and your purchase of the business can be successfully closed.

You will now join many other who, like you, have chosen to become self employed!