• Luke Middendorf

Business Brokers: What are they and how can they help you sell a business?


Business Brokers: What are they and how can they help you sell a business?

Business Brokers: What are they and how can they help you sell a business?


Are you thinking of selling your business? Are you ready to learn about what a business broker is and how they can help you with the process? In this post, we’ll uncover exactly what a business broker is and how their roles can help you in the successful sale of your business.


What is a business broker?


A business broker helps facilitate the sale of a business.


They work with business owners to complete the sale of their business quickly and efficiently, providing valuable assistance throughout the process. In addition, their guidance, advice, and other resources enable business sellers to attract the highest and best offers for their businesses.


Additionally, brokers have specialized knowledge when it comes to selling a business. They are educated on market realities, allowing the seller to receive the best return on investment.


What are the roles of a business broker?


Here are the key roles a business broker executes when it comes to selling a business:


Determine the valuation of the business


Business brokers are experienced in understanding financial documents as well as market trends. Once they have analyzed your financial statements and evaluated the current market value of similar businesses, they can provide you with a Broker's Opinion of Value. This helps create a realistic asking price that will attract serious buyers.


Create a marketing strategy


Business brokers are also savvy marketers with an extensive network of contacts in the business world. A good broker will have a large database of interested buyers and can help present your company in the best light to potential buyers. They understand what potential buyers are looking for and can create listings focusing on crucial selling points.


Keep the seller’s information confidential


As potential buyers begin to show interest in your business, it is the broker’s responsibility to screen those potential buyers. The buyers that pass the screening process are sent a non-disclosure agreement (NDA) which they are required to sign before any confidential information is shared about you or your business.


Part of the marketing process includes creating a Confidential Business Review (CBR). The CBR is a document that outlines your business’s key financial metrics and marketability, and it’s only released to buyers that have passed the screening process and signed the NDA.


This way, brokers can perform a wide range of marketing while maintaining strict confidentiality.


Identify potential buyers and manage negotiations


Business brokers have the tools, resources, and connections to find the right buyer for the sale of your business. They will receive inquiries from buyers on the seller’s behalf, sort through the prospects to identify the right buyers, and have the buyer sign non-disclosure agreements before releasing further information about the sale.


They will also manage the sale negotiations and help keep them on track. The negotiations require multiple interactions with the buyer and include many different elements, such as the asking price, transition period, asset valuation, and accounts receivable turnover, to name a few.


Provide due diligence and finalize the sale


Throughout the process of the sale, a good business broker will have a strong attorney to help ensure that all financial and business documents are accurately compiled. The attorney can help prepare closing documents, escrow management, and finalize your sale. Additionally, a business broker should ensure that all paperwork is in order at closing and that you understand everything before signing.


A business broker is a helpful advisor that can help you with the sale of your business from start to finish.


To learn more, this article, The Process of Working with a Business Broker to Sell Your Business, describes the entire process of working with a business broker to sell your business.


Need help getting started?


We provide a free consultation. Talk with one of our business advisors to help you understand if we are the right Sacramento business broker to work with. They will help guide you through the process and answer any questions that you may have.

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