If you’re unfamiliar with the selling and buying of businesses, then the term ‘business broker’ could be a bit perplexing. In this article, we will be looking at who these professionals are, what they do and tips on hiring one.
What is a business broker?
Business brokers, like these, are professionals who’ve received specific training and have experience in helping others buy and sell businesses.If you have ever sold or bought a home, chances are you worked with a real estate agent. In essence, the roles of a broker are very similar to those of a real estate agent, with the only difference being the broker helps you sell or buy a business; which is a more complex endeavour on its own. Just like what real estate agents do with properties, business brokers can help you sell or buy a business.
Roles Business Brokers Play In The Buying and Selling of Businesses
Brokers play very valuable roles in the business buying or selling process as they provide the resources, advice, and guidance needed for a transaction to happen. These professionals typically have years of experience and training in matters related to the buying and selling of small to medium-sized businesses, and can, therefore, provide expert guidance, saving your money and time. Most business brokers are well connected with attorneys, accountants, finance experts and other professionals that you may need to facilitate a sale.
For a seller, business brokers can help determine the most appropriate price for a business, put together a marketing package, and do all the groundwork needed to market the business. Even before a business is placed on the market, business brokers can provide useful advice on how to properly prepare your business for sale. All the things a broker does make it possible for the business owner to focus on what they do best – and that is, run their business. For buyers, brokers can present them with opportunities and sellers that meet their financial objectives, passions, and skill sets.
Brokers generally work on a commission basis, with most charging 10% of the sale price (though this may vary). The client normally pays this commission once the deal has gone through. However, like in any profession, there will always be good brokers and the not-so-good ones. When choosing a broker, it is vital that you consider a couple of things to ensure that you choose someone who will perfectly fit your needs.
Tips To Consider When Choosing a Business Broker
Interview Several Brokers
It is vital that you take the time to interview three to four brokers. This will allow you to compare their rates, areas of expertise, training, experience, and connections with relevant professionals within the industry, making it easier to choose the most qualified professional to cater to your needs.
Ask for References
If the person you are considering is a professional and dependable broker, they will have a list of pleased customers who’d be willing to provide testimonials about their work.
Review Their Credentials and Resume
It is wise to know more about the person you are considering. With that being said, take the time to question them about their certification, how long they’ve been working as a broker, the areas they specialise in, number of transactions they’ve successfully managed, and so forth. This way, you get a clear picture of the person you will be working with and what they can achieve for you.
If you have a business, you are looking to sell or want to buy one; then business brokers are a great option. Get in touch with one today for advice and guidance.