Why should I use the services of a business broker?
1. Industry experts indicate less than 20 percent of all businesses listed for sale actual sell. Unrealistic expectations from the seller is the biggest mistake when trying to sell their business overriding declining sales, burn out, poor financial record keeping and emotional attachment. Typically business values center around two main factors cash flow and assets. At Murphy Business we have tools and methods of presenting your business that shows buyers the true value of a business. If you sell your business yourself and present tax returns to potential buyers, it will be difficult for the buyer to see the true cash flow they can expect to generate when they acquire your business. Business brokers have the tools and resources to present your business to buyers giving them the clear picture of the cash flow which will have a dramatic impact of the business value. Presentation and a systematic methods of supplying buyers with information brings value to the transaction.
2. The International Business Brokers Association (IBBA) indicates that 55% of buyers in today’s market are first time buyers. Our job is to sell your business and that requires brokers to assist the buyers throughout their process. Assisting buyers in obtaining financing, supplying the necessary paperwork, putting buyers in contact with proper professional in varies industries, assisting in lease negotiation and property transactions, facilitating the due diligence of the buyer are a select few examples of how we help the buyer ultimately increasing the chances of your business of selling. Bottom line – buyers normally do not have experience in purchasing a business. Our job as a broker is to help buyers through this new found territory which ultimately gets your business sold.
3. The national average time a business is on the market, from list to close is 9 months. Some business sell much quicker and some never sell. Obtaining financing through SBA can take 3 to 4 months. Success with lenders takes true dedication and communication to make sure these lenders have all the needed documentation to process the loan. Selling a business takes a lot of man hours and can become consuming. Preparing a detailed offering package, preparing a business valuation, developing a marketing plan, implementing the plan and contacting potential buyers, qualifying buyers, presenting the comprehensive portfolio, negotiating the sale, conducting due diligence, arranging the necessary closing documents and finalizing the close can take hundreds of man hours. A broker can do all of this while keeping the sale of your business confidential. Yes it is possible for you as a business owner to take on these responsibilities but it will take your focus away from other priorities which could ultimately reflect in the performance of your business impacting the value of your business.
4. ”The buffer” – Negotiations 101 – It’s always good to have a third party relaying communication between buyer and seller. Brokers become the conduit to help deliver the message. Who knows, you may end up selling your business to a long time competitor. Direct communication between two parties with different agendas can escalate quickly. There may be instances where you have to retract or modify an offer and certainly times where you’ll need to adopt an aggressive negotiating position. Most business sales include a training period from the seller after the purchase. Let the business broker be the bad guy or deliver the bad news. Were pretty good at softening the blow.