The process of selling your business is quite complex. But good business brokers and intermediaries have the experience and knowledge required to manage the process efficiently. They have the required abilities in business improvement, accounting, marketing, taxes, sales, finance, negotiations, law, valuation, and more. Choosing the right business intermediary or broker, therefore, is a very important decision.
What Is a Business Broker or Intermediary?
Whether you want to buy a business or sell one, chances are you will need to engage a business broker or intermediary. Your broker will help you navigate the complex and often frustrating process. The broker/intermediary is the agent of the principal, who is the client. The principal is either the business seller or buyer.
The other party involved in the business transaction, whether it is a seller or buyer, is the broker/intermediary’s customer. This is akin to what happens in the real estate sector. If you are the seller, your business broker will help you streamline and structure everything from pricing to marketing. If you are the buyer, you need to keep this point in mind. An experienced broker or intermediary, however, can also help you narrow your search options as a buyer.
Transaction business brokers, along with standard brokers, also play a role in such transactions. They help sellers and buyers carry out transactions, but do not act as an agent to either party. Buying or selling a business is one of the most important decisions you will ever make. Therefore, you need to know what to look for in business brokers and intermediaries.
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How to Find a Good Business Broker or Intermediary
Whether you are selling or buying, you need to find a business broker who will help you achieve your goals without hurting your business. Some of the steps to take include:
Rely on Newspaper Ads or Referrals
Seeking referrals from people you trust in your business circles is a great way to find a good business broker. After all, the best broker-principal relationships should be those based on trust. Another great way to find a business broker is through the business section of a newspaper.
Look for Certifications or Professional Memberships
Being a member of a professional association, such as the International Business Brokers Association, is a sign of a reputable business broker. It is a good idea, therefore, to work with a broker who is a member of such an association. You can also narrow down your search further by looking for Certified Business Intermediaries. Such intermediaries must uphold the highest ethical standards in their business operations.
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Avoid Brokers Who Are Too Focused on Profits
A good business broker/intermediary, in most cases, should focus on their fiduciary obligation to you. Essentially, they must exercise forethought and discretion when it comes to your interests and financial decisions. Avoid brokers who seem to put their interests above your financial health.
Stick to Standard Terms of Pricing
Standard business brokers and intermediaries work on commission and earn money with a percentage of the sale price. If a broker you are considering working with adds some unreasonable fees, simply walk away.
You need a business broker for the same reason people use real estate agents when selling or buying property. The broker will remove the unexpected from what is a complicated transaction. They will also help you receive the best price on a sale or make a sound investment if you are buying. The process of transferring a business involves a lot of money. Therefore, you need to put the knowledge and experience of a business broker/intermediary to good use.