A business broker can help you to prepare your business for sale, market the business and finalize the sale, acting as your representative.
You may be asking yourself why you should sacrifice part of the revenue from the sale of your business for a broker's fee. After all, brokers typically ask for 6 to 10 percent of the value of the sale, and that is money that would otherwise stay in your pocket.
In addition, the broker gets paid when the business sells. That may provide an incentive to sell your business quickly, but the broker may not be motivated to seek out the best price for it.
Additionally, there is no dedicated qualification for business brokers in Canada. You have to evaluate their qualities and qualifications yourself, and an unqualified, inexperienced business broker could potentially do more harm than good.
In order to find the right business broker, ask people in your professional network about brokers that they've had positive experiences with. Look for educational qualifications, and look for brokers who have real estate and mortgage broker's licenses. That tells you that they have the kind of background knowledge they'll need to be effective.
A business broker helps you prepare for the sale
An experienced and well-qualified business broker is an enormous asset in the sale of a business.
Do you know how much your business is worth in today's market? Probably not, but a business broker will have the resources and knowledge to give you a fairly accurate estimate.
A broker can also help you to prepare your books and physical premises for sale. They know what buyers are looking for, and they will help you package your business in a way that will impress people who are looking to buy.
A business broker helps you find a buyer
Your business broker will know how to market your business to potential buyers. They will have access to people who have shown an interest in buying a business like yours, and they will give them information on your firm.
"Business brokers are experienced in dealing with potential buyers, and they know what questions to ask in order to distinguish serious prospects from people who may not have the resources or qualifications to take over your business."
It is likely that they will be able to market directly, online and through industry publications. They can also keep the impending sale confidential so that your employees and suppliers won't worry about the stability of your business.
Business brokers are experienced in dealing with potential buyers, and they know what questions to ask in order to distinguish serious prospects from people who may not have the resources or qualifications to take over your business. Once the broker has found a few qualified buyers, they will know how to turn that to your advantage.
They may be able to inspire competition between the prospects, helping you to get a good price and an enthusiastic purchaser. The broker will negotiate on your behalf and will know what strategic moves to make in order to increase the chances of a sale that you and the buyer will both feel good about.
A business broker helps close the sale
A business broker will be able to provide you with the legal paperwork needed to close the sale. They'll know
So it's up to you to weigh up the pros and cons.
Looking to buy a business?
Of course, the seller pays the business broker, and the broker will represent the seller's interests first and foremost. Part of the service they provide is to help potential buyers through the process, but if you're a potential buyer, then you may want to use your own business broker or legal council to help level the playing field.
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