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How to Choose the Right Business Broker to Sell Your Business
I owned a company that I started for nine years. When I decided the timing was right to sell my company, I talked to several business brokers. Only one took the time to understand my business and the value it could bring to a new owner.
As a business owner, you've put your heart and soul into building your company. But perhaps the time has come to move on. Whether you're ready to retire, explore new opportunities, or take a step back, selling your business is a big decision. Proper guidance on your journey is critical; a business broker can partner with you throughout the sale process.
Not all brokers are created equal. You want someone who understands your business, communicates well, and helps you get the best deal. Just as a good business broker can save you time and maximize your profits, an inexperienced broker can cost you time, money, and stress.
Selling your business is a significant decision and can be a time-consuming process. You want to be sure that you work with the right person. Here are a few things to look for when searching for a business broker in Roseville.
Understand Your Goals and Needs
Before looking for the right broker, you'll need to consider your goals and needs. Why do you want to sell your business? While answering this question can seem challenging at first, clearly explaining your goals can help you reach your desired outcome.
To help you gain a firm grasp on your goals from the sale, here are a few things to think about:
Know why you want to sell. Are you ready to retire, try a new venture, or move on to something else? Knowing your reason will help to guide your choices.
Understand what you want to achieve from the sale. Do you simply want a fair price? Or maybe you want to ensure your business continues to thrive and your employees are well taken care of.
Think about your timeline. Do you need to sell quickly, or can you take your time finding the right buyer?
Write down your thoughts and ideas. This can help you better remember and share with your business broker when the time comes.
The more you can tell a business broker about what you need from the sale, the better they can help you meet your goals.
Research Potential Brokers
Whoever you choose to work with should have your best interests in mind and a known track record. When searching for potential brokers, you can start by asking friends or other business owners for recommendations. You can also review online directories and websites for brokers in your area.
Once you have a short list, take some time to interview each one. Think about how they make you feel from your first conversation and if the business broker would be a valuable addition to your experienced team of advisors.
Consider the following:
Will they prioritize your best interests?
Did they ask detailed questions about your business, background, and reason for selling?
Did they provide any examples of other companies that they've sold?
Did their examples include businesses comparable to yours in value and market size?
Do they have a marketing plan or smart sales strategy?
Do they value confidentiality?
Were they able to provide a list of client references and credentials?
Meeting a business broker in person or through a video call is like interviewing a potential teammate. It helps you know if you can work well together and feel comfortable having an open conversation with them. Be sure to ask lots of questions to get to know them better.
Evaluate Their Experience
Now that you've found a few potential business brokers, it's time to look into their level of experience. You'll want to work with someone who has industry-specific knowledge and who knows how to get businesses sold.
The right business broker should have specific certifications such as IBBA (International Business Brokers Association) or CBI (Certified Business Intermediary). It's beneficial if they have knowledge of your specific geographic market and have successfully sold businesses similar in value, too.
When searching for a business broker, ask them the following questions to learn more about their experience:
What businesses have they sold recently?
Do they have experience selling businesses in your industry or niche?
Can you check online reviews and ratings that show what previous clients have to say?
What are their credentials?
Can they provide referrals from past clients and contacts they have worked with, such as CPAs and attorneys?
The right business broker will have the knowledge and background to quickly and effectively sell your business for the right price.
Assess Their Sales and Marketing Plan
While experience is important, a knowledgeable business broker should also have a clear sales and marketing plan. Their strategy should outline how they intend to market your business and attract the right buyers.
Business brokers should also have a process for narrowing down and vetting potential buyers. They should focus their efforts on those genuinely interested in your industry and type of business. Knowing that you're only working with serious prospects can save you time and stress in the long run.
Here are a few questions you can think about when assessing a business broker's sales and marketing plan:
Did they take the time to understand your business, key metrics, core differentiators, and unique selling propositions?
Do they have an existing database of buyers to market to?
Do they have experience crafting a compelling listing for the sale of your business?
Do they possess strong negotiation skills?
What are the websites that they use to list your business?
Who's responsible for creating the confidential business review?
Good business brokers are also savvy marketers and communicators. They should have a list of potential buyers to reach out to and understand how to present your company in the best light.
Check That They are Confident in Business Valuations
A seasoned business broker will know how to accurately assess the value of your business. Instead of a generic calculation, they will request in-depth documents to see the whole picture of your business. They must have a firm grasp on determining the right price tag for your business.
A few things a business broker will ask for and evaluate to determine the value of your business include:
Financial documents include tax returns, income statements, cash flows, and balance sheets.
Key Assets
Location
Industry and market trends
Your business's potential for growth
Remember that while confidence is vital, it should also come with objectivity. Your broker should balance their confidence with a realistic understanding of your business's strengths and weaknesses. Experienced business brokers know they need to fully understand the ins and outs of your business to make the sale and maximize your profits successfully.
Are You Searching for the Right Business Broker to Sell Your Business?
Selling your business is a major decision; selecting the right business broker can make all the difference in your success. Don't hesitate to contact potential brokers, ask questions, and explore your options. Your business is a valuable asset, and it deserves the best guidance.
If you're ready to begin your search for the right Sacramento business broker to sell your business, contact us today for a consultation. We're here to help you navigate the path to a successful business sale and a promising future.