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Why Do You Need a Business Broker?

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There comes a time when a business owner carefully assesses their situation and decides it’s time to sell their business. If you are on the same spot, you might be wondering, do I sell the company on my own or should I involve a business broker? And if so, who is perfect for the job?

These seemingly harmless questions can be actually daunting when you begin to consider them seriously. This read, however, takes a look at a few good reasons why a business broker can be the best option when it comes to selling.


Conduct Financial Analysis & Valuation

A competent business broker will produce an ideal financial analysis of your business, showing an appealing and precise image of your earnings. They will work hand in hand with you and your accountant to create a cash flow analysis (also known as Discretionary Earnings) that will clearly showcase the actual profitability of your company. Net income is usually for tax purposes and doesn’t reflect how much money a business really makes. A professional business broker, on the other hand, will produce something that will show potential buyers your actual cashflow.

Give a Brokers Opinion of Value

A professional business broker will ideally utilise the financial analysis to help arrive at the best price point for selling your company. A price that’s not too high to scare off potential buyers and gives you great value for a company that you’ve invested so much in. Additionally, business brokers’ valuations relies on their massive database of industry and transaction data that they have researched.

Risk

Just how will you know if the individual or group of people looking at your company and the confidential information are actually interested in purchasing? Are they ready to buy now or are they just kicking tyres? A professional business broker is experienced in finding just the right buyer for a business. These specialists help maintain your confidentiality by asking potential buyers the right questions and creating the right steps for information delivery.

They also ask the potential buyers to sign an non-disclosure agreement (NDA) before giving out sensitive information and if the interest is there, give a financial qualification bio. Knowing whether the buyer has the financial capability to buy your company is essential. A business broker helps confirm that the buyer is a genuine and serious candidate to acquire your business.

Time

Do you really have the time to show your company? If you are like most business owners, then you are always busy handling the company’s core aspects. Also, sorting out the qualified from the non-qualified tends to take a lot of time and effort, which has an impact on the short-term profitability of the company.

Help With Negotiation

The business broker will be representing you during the price and terms negotiation process. Having an intermediary represent you gives you a huge advantage. These professionals are highly experienced in negotiations and can really come in handy in this vital step. They negotiate deals on a daily basis, and so, they know what buyers think and the best strategy to implement.

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