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What is a Business Broker / Business Intermediary? |
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A Business Broker is an individual who
works with either buyers or sellers of businesses to help them realize their
goals.
The Business Broker determines the value of a
business, determines whether or not a sale makes sense, and recommends the
proper terms and structure for the sale. The business broker can handle the
various aspects of a transaction including developing a marketing plan,
executing the plan, locating and screening potential buyers, negotiating the
price and the terms of the sale, and assisting buyers in obtaining proper
financing.
A Business Broker can help a buyer to determine exactly what type of
business he/she is looking for, based on the buyer’s goals and financial
picture. The business broker can then locate and evaluate businesses that
meet the buyer’s criteria. A business broker can handle all aspects of the
transaction, including negotiating the price and the terms of the
acquisition and assistance in securing financing. Finally, a broker
maintains a network of contacts in the business community that provide
information about confidential situations that are not available through
public channels.
To the right is a summary of the services offered by business brokers for buyers
and sellers. |
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Why should I use a Business Broker? |
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"At the end of the
day, the main reason to use a business broker is your bottom-line." |
| The process of buying or selling a business
requires dedicated, professional attention. 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 buyers and
business owners money by helping them to avoid costly mistakes, effectively
marketing the appeal of the seller's business, and maximizing exposure to
serious, qualified buyers--all with complete confidentiality. |
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Why use a Broker?
Ask yourself: |
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? |
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In every-day life your home and your automobile are rightly
assumed to be your largest assets. However, when it comes to business
ownership, the business value usually takes first place. Therefore, you want
to secure the best possible advisor for the sale or purchase of your largest
asset.
A business broker adds tremendous value to the
sale or purchase of a business. The process of buying or selling a business
can be time consuming. Thankfully, for your business broker it’s not the
first time. Business brokers have the experience to navigate the process of
buying or selling a business, and will guide you through it. Even more
important, business brokers know how to properly value businesses and
structure terms to ensure that you get the best deal possible.
At the end of the day, the main reason to use a business broker is your
bottom-line. For sellers, using a business broker will result in more
buyers, which will create a more competitive environment in the bidding
process. Also, a business broker will know how to identify the right buyer –
the one who truly understands the value of your business. For both buyers
and sellers, using a business broker will mean having an experienced,
knowledgeable partner representing you in the transaction. You will leave
the transaction confident that you got the best price and the best terms
possible.
Business brokers have the knowledge and
experience to help you reach your goals on the best possible terms, with
the best end result for your bottom-line. If you are seriously
considering buying or selling a business don’t take any chances – put
the experience of an AccuBrokers business broker to work for you.
The answer is clear: The sale of your business demands a professional,
just as running your business has demanded a professional. AccuBrokers has
the expertise, tools, and connections to market and sell your business
successfully on a national basis. We work very hard to protect your
business investment and maximize your net after tax profit on the sale. It
is to our advantage and yours to obtain the best possible price that a
reasonable buyer will pay. We pledge to maintain high ethical standards
and open and honest communications in all of our business relationships. |
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What affects the selling price? |
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Several factors come into play. Two of the most critical are price and
terms. Over eighty percent of all businesses sold above $100,000 are sold
with one-third or less down and the owner financing the balance. Asking for
one-half down will reduce the price by approximately twenty percent. Asking
for cash will reduce the price to forty to sixty percent of the one-third
down payment price.
A buyer is trying to buy as much business as possible for the money he has
to pay down. When a seller asks for $200,000 down on a $400,000 value
business, the buyer will keep looking until he can find a $600,000 value
business where the owner will accept $200,000 down and finance the balance.
High percentage down payments cause buyers to discount offers. The business
owner who asks for all cash is not going to succeed because buyers know they
can buy three times as much business for the same investment.
The quality of the information provided to a prospective buyer is critical.
The value of the assets and cash flow generated by the business must be
provable and verifiable. A professional business broker will be able to
assist the business owner in arriving at these values.
Competition among buyers creates higher selling prices. When a business is
over-priced or the owner does not offer reasonable terms, there will be few,
if any, buyers interested in acquiring the business. When a business is
priced realistically, and with proper terms, several buyers are likely to
pursue acquiring the business. A buyer who knows he has other buyers
competing for the business will be highly motivated to offer the price being
asked to ensure he does not lose the business to another buyer's better
offer.
Getting a valuation for your business also (obviously) affects the selling
price. Not only will you get a true value of your business, but when
it comes time for negotiations, the buyer has much less to haggle about.
In fact, when a business has been valued the business will usually sell for
listed (valued) price. Unfortunately, for businesses that have not
been valued, they usually sell for around only 75% of their listed price!
So, if you want to make sure that you get the highest possible price for
your business, make sure you get it a professional valuation! |
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How will my business be advertised? |
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The advertising of each business will depend upon the size and type of
business and the number of potential buyers in our data base. Affiliates use
the Wall Street Journal and buyers from other affiliate offices, plus our
data base of over 1,000 investment groups to sell their larger listings. We
try to use local newspapers as little as possible because it is extremely
difficult to protect confidentiality when a business is advertised locally.
Affiliates also use other top business listing sites on the Internet. |
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What do I need to do to help sell my business? |
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The first thing you need to do is offer the business at a realistic price
and with reasonable terms. You need to provide as much information as is
possible to the broker so a professional marketing package can be prepared
on your company. The quality of the business profile will greatly enhance
the salability of your business. An AccuBrokers prepared package will
contain twenty-five to sixty plus pages of information. Informed buyers make
better offers. |
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If you do nothing else, at least get a professional valuation! |
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Continue to run your business in a normal manner. Keep the business clean
and organized so potential buyers will like what they see. Liquidate or set
aside obsolete inventory and unneeded equipment before you place the
business on the market.
Notify your broker of any material changes in your business. Forward monthly
financial statements to the broker as soon as they are completed. This will
keep your marketing package current.
Do not meet with potential buyers without your broker being present. Avoid
direct negotiations. All offers and counter-offers should be in writing and
should be presented by the broker. |
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Can you sell my business? |
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Only with your help! A broker cannot really sell your business
because he does not know how your business operates. A professional broker's
initial job is to get a business listed at the best possible obtainable
price and with realistic terms of sale. The next job is to qualify buyers to
keep you from wasting time with people who are not financially qualified to
meet your requirement. Qualified buyers will be presented your business
profile after they have completed a Buyer Warranty and Confidentiality
Agreement. The broker will then schedule a meeting between the business
owner and the interested buyer. The business owner will explain and 'sell' the business
to the buyer. After this meeting, the broker will work to get a written
offer to purchase. The broker will then present the offer and after
acceptance will coordinate the due diligence process that will lead to the
closing. |
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How can I get other questions answered? |
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Feel free to
contact AccuBrokers. We will gladly
answer your questions. |
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Portions of
this article are from IBBA |
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