According to the Small Business Administration (SBA), a business is considered “small” if it has fewer than 500 employees. According to this government agency, in the US there were more than 2009 million small businesses in 27,5.
As we can see, the market for the purchase and sale of small companies is broad and dynamic to the point that it is estimated that around 30% of this vast universe is always in the process of being sold. It is in this market where business brokers develop their activity.
A business broker is a professional qualified to advise buyers and sellers at all stages of the process of buying and selling their companies.
As in all professions, there are different categories of Business Brokers in relation to their experience, specialty and working methods. Below I present 7 good reasons to hire a business broker:
1 Specialization. When a business owner hires a broker he can rest assured that he will be able to spend the bulk of his time continuing to operate his firm. The broker, for its part, will be in charge of a) Placing the company for sale in the Market; b) Interview and screen potential buyers to ensure they have the necessary financial resources and managerial capacity. Advise the parties in all stages of the process: Option, Analysis Period, Documentation and Closing
2 Confidentiality: This is, perhaps, the main difference between someone who sells real estate and a business. The broker must maintain the confidentiality of his mission and take safeguards so that neither the employees, nor the suppliers, nor the competitors find out that a sale process is underway.
3 Rating. An experienced broker will be able to issue an opinion of the value of the company that serves to approximate a sale price, in line with the aspirations of the seller.
4 Business Listings. Business brokers are usually subscribed to multi-listing systems where the businesses that their colleagues have for sale are also published. Thus, when you hire a broker you are getting the support of a large sales force linked to the brokers' association.
5 Wide Exposure. Business brokers often have affiliation with specialized websites where they can advertise the companies they have for sale. The listings will have exposure worldwide, via the Internet.
6 Intermediation. The broker serves as an articulation between the buyer and the seller and acts as a transaction agent that seeks to harmonize the wishes of the parties.
7 Documentation. The broker is in charge of coordinating with the parties all the steps of the analysis process of the accounting and administrative books; The lease; licenses and permits and other paperwork. Likewise, it will coordinate with the Closing agent the documentation related to the transfer of business assets to the buyer.
If at this point you are convinced of the convenience of hiring a business broker, remember the phrase of AAnimal Farm, Orwell's famous satirical novel: "All animals are the same, but some animals are more equal than others«. Therefore, when you go to hire a broker, observe the following tips:
- Ask for references.
- Check your reputation with professional associations.
- Examine the credentials.
- Find a specialist.
- Demand confidentiality.
- Know the marketing plan.
- Check the commission amount.
- Do not accept pressure.
Although a business broker will advise you during the process of selling your business, the seller will always be you. To the extent that bonds of professional and personal respect are developed between the parties, the greater the benefit that will be obtained from the relationship.
And finally, keep in mind that if you are not satisfied with the performance of your broker, there will always be the possibility of hiring another one that will give you greater satisfaction. For now, I wish you good luck...