Using a business broker

Selling a business can take a lot of time and effort, so it is a good idea to get professional help. Business brokers are experts in helping their clients to sell and buy businesses. You can find business brokers by searching the internet, Yellow Pages, real estate websites and industry-specific magazines and publications. A business broker will usually charge a percentage of the final sale price as a fee for their work.

You'll need to weigh the pros and cons of using a business broker, and make the decision that is best for you.

Advantages of business brokers

  • They will have experience in marketing and advertising businesses for sale.
  • They can save you time by screening buyers and deciding who is and isn't serious.
  • They will usually already have a list of contacts who are looking to buy.
  • Business brokers feel confident and comfortable with requesting the disclosure of a buyer's financials and are well placed to make decisions about them.
  • They can remain independent through the process and work efficiently towards selling your business without the emotional attachment that you may have.
  • Typically, brokers have strong negotiation skills.

Disadvantages of business brokers

  • You have to pay for the services of a business broker.
  • You might feel you lack control over the process if you are used to doing everything yourself.
  • You might feel some pressure to accept a contract you're not happy with.
  • They may want you to sign a contract at a lower price rather than not selling because their fee is a percentage of the sale price.

Choosing a business broker

If you do use a business broker, assess their experience and expertise before you hire them. Find out:

  • how their fees are structured
  • if they specialise in a particular type of business
  • how many businesses they have bought and sold
  • if they have ever owned a business
  • if they can provide letters of reference
  • how many clients they are currently working with and if they have time to properly represent your business.

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