Steps to Selling Your Business With a Professional Business Broker

Whether you’re looking to retire or you just want to move on to a new business venture, selling your company brings a tremendous sense of accomplishment. However, the logistics of selling that company can quickly become overwhelming. 

As you may already have discovered, the challenges of selling a business are quite different from the challenges of running one. But when you work with business brokers, you can rest assured that the sale is in the hands of competent professionals — and that you’ll have the time to keep your company running smoothly right up until the sale. 

Here’s an overview of how the sale process works.

Step 1: Choosing Your Broker

A successful sale starts with the right broker, so you should take your time when making a selection. Here are some tips to help you ensure you choose the right broker:

• Make sure the broker has experience in your industry

• Make sure they have experience selling businesses of a similar size to yours

• Verify their licensing information

• Ask them about their marketing plan

• Ask for past client references

Take your time with this process. You should also make sure your broker is someone you feel comfortable talking to — communication skills are an essential part of what business brokers do!

Step 2: Business Valuation

Business brokers can take the time to evaluate your business and give you a highly accurate, fact-based business valuation. While you can get a general idea of your company’s value through online calculators and similar tools, a precise valuation is an essential part of the sales process.

Step 3: Finding Potential Buyers

While business brokers excel when it comes to marketing businesses, many do not need to publicly list a company to find a potential buyer. That’s because brokers maintain active networks of people interested in buying companies like yours. That means they can quickly assemble a short list of would-be buyers for your consideration.

Step 4: Choosing a Buyer

Your broker can handle communications with potential buyers, but ultimately, the choice of buyer is up to you. Your broker can discuss your available options and help you select your preferred buyer.

Step 5: Negotiation and Deal Structuring

This is an area where experienced business brokers can more than make up for their fees. Your broker can negotiate a price and various contingencies with buyers, and once you agree on the terms of the sale, the broker can draw up the necessary contracts.

Step 6: Post-Sale

A broker’s job doesn’t end when the sale is finalized. Selling a business often comes with significant tax implications, and your broker can help you navigate them.

Are Business Brokers the Right Solution for You?

While working with a business broker might not be the right choice for everyone, it makes the sales process simpler and leads to increased profits in the majority of cases. When you take the time to find an accomplished broker with experience in your industry, you’ll be well on your way to a stress-free, successful sale.

How Do Business Brokers Enhance Business Sale Success?

The sale of your business is arguably one of the most complex financial transactions you’ll ever negotiate. The process of getting a business valuation and setting your asking price is just the beginning; potential buyers will likely want to negotiate contingencies, financing, timeframes, and almost any other aspect of the sale you could imagine. 

If you want to maximize your chances of negotiating a sale that’s favorable to you, working with business brokers is critically important. Here are a few key ways in which they can make a difference:

1. They Can Give You a More Accurate Valuation

Before you sell, you need to know your business’s true value. If you put it on the market without knowing its worth, you might shortchange yourself by thousands. Alternatively, on the opposite extreme, you may even go for months without any offers because you’ve accidentally overvalued the company.

An online business valuation calculator can give you a general idea, but business brokers excel when it comes to giving you precise numbers.

2. They Can Screen (and Connect With) Buyers

As brokers handle business deals for a living, they can quickly tell who’s serious about purchasing your business and who isn’t. Perhaps more importantly, though, is that they also know how to find interested buyers. Brokers usually maintain a network of people interested in purchasing specific businesses, which means they can often expedite the sales process.

3. They’ll Handle Negotiations for You

If you want your business sale to be as successful as possible, you need to be a savvy negotiator. There’s almost always some level of compromise on both sides during a sale, but if you don’t know exactly what you’re doing, it’s entirely possible to be taken advantage of. 

Business brokers know what elements of the sale can be compromised on and which ones cannot. And because the amount they earn depends on the final sale price, you can be assured that they’ll be just as motivated as you to secure a high sales price.

4. They’ll Save You Time

Some business owners who opt to sell their companies themselves seriously underestimate the sheer investment of time and energy the process requires. If you’re an owner-operator, you might find that the many tasks associated with a sale, such as the ones below, make it difficult to focus on running your business:

• Responding to inquiries

• Screening potential buyers

• Performing due diligence

• Negotiating terms of the sale

• Ensuring the sale complies with all applicable laws

If you start to have trouble balancing the sales practice with running your business, your business’s value may decrease, which can drive away potential buyers.

Is Working With a Business Broker Right for You?

Some business owners believe they can save money by negotiating the sale of a business themselves. However, unless you already have extensive experience in sales, a business broker’s fee will almost always pay for itself and then some. When you take the time to find a broker with a proven track record of selling businesses in your industry, you’ll be well on your way to a successful sale.

Leading Business Broker Strategies for Maximizing Sale Value

If you’re considering selling your business, it’s essential to find a way to make your company stand out, especially in today’s competitive sales landscape. However, unless you have prior experience selling businesses, you may not know exactly how to do so. 

On that note, check out the following list of some top business broker strategies for maximizing your business’s sale value:

Get an Accurate Valuation

If you want to increase your business’s sales value, you should start by getting its current valuation, as looking closely at it can give you a clearer idea of where you can focus your efforts.

It’s critical that you make sure the valuation you get is as accurate as possible. Online calculators can give you a solid estimate, but a business broker can look closely at your business and give you a more precise result.

Take Steps to Improve Profitability

Increasing your business’s profitability is always a good thing. However, if you can do so right before you sell, you may be able to considerably increase its sale value. Here are a few suggestions:

• Reduce overhead costs if possible

• Evaluate current policies and procedures for any inefficiencies

• Assess your business model and adjust as needed

• Try to grow your customer base

Of course, you should also make sure that potential buyers are able to see your newfound new profitability, too. Organized financial statements are particularly important to have on hand.

Consider Diversifying Your Revenue Streams

Such a tactic may not be feasible for every kind of business. Nevertheless, when you’re running a business, diversity generally leads to greater stability. You don’t have to reinvent the wheel, either; even a slight variation of what you do currently can make a difference. For example, if you run a vintage clothing store, you might consider offering subscription boxes as well.

Cultivate Your Brand

Though you might not be able to assign an exact dollar value to a strong brand identity, building a strong brand is nevertheless one of the most effective business broker strategies for increasing your profitability before a sale. A recognizable brand lends credibility to your company, making it easier for your customers to stay loyal.

Keeping your brand consistent across every customer experience is critical for your success. You should communicate the same essence and brand personality wherever your logo appears, such as:

• On your website

• In your brick-and-mortar locations

• On your social media pages

• In your email marketing campaigns or ad campaigns

You can build a brand (or strengthen one) on your own. However, you may get better results if you work alongside a marketing professional. These individuals will know how to connect with your business’s target audience, a key ingredient in your company’s long-term success.

Don’t Rush the Process

Once you’ve decided to sell your business, you might be eager to get it on the market right away. However, selling your business is not a process you should rush, and neither is maximizing your business’s value. When you take the time to get an understanding of your company’s value and use the right business broker strategies to increase that value, you’ll almost certainly be rewarded with a profitable sale.

Business Brokers Specialize in Selling so You Can Continue Operations

Moving on is in the future of every entrepreneur or small- and medium-business owner. There’s no shame or guilt in admitting that. Thinking about it up front shows your business acumen and how much you care about your company, employees, and customers.

That’s because selling your business is no small matter. You may be counting on the proceeds from the sale to fund your retirement or next adventure. Also, your employees have families to care for, and customers still need their products or services.

Whether moving on to another venture or retiring, consider engaging business brokers, such as Sunbelt Business Brokers, to help plan your exit years before you hang up your hat. Business brokers can use their special skills to handle the complex process of the sale while you remain focused on operating your business.

What Are Business Brokers?

Business Brokers, or business transfer agents or intermediaries, are individuals or companies that can help you sell or buy a business. Sunbelt Business Brokers have spent years acquiring experience in business valuation, confidentiality, due diligence, compliance, and marketing, as well as skills in negotiating, closing, selling, or buying a business.

Consider the tasks and responsibilities business brokers carry out to sell your business:

• Estimating the value of your business

• Marketing your business for sale

• Vetting potential buyers

• Negotiating the terms and price of the sale

• Structuring the deal

• Completing the due diligence

• Closing the transaction

Selling your business is no time to go it alone, no matter the level of your business skills. You also don’t want to wait until the nameplate is being changed on the door. Getting business brokers onboard years before your exit is your best chance for a successful outcome for all involved.

Why Use Business Brokers?

One of the biggest keys to selling your business when you want, how you want, and at the price you want is to continue its operation with no disruption. Your employees feel assured about their jobs, potential buyers view your company as strong and stable, and you can continue to build your company’s value.

Business brokers can handle all the tasks necessary to sell your business, including recommendations on growing the value of your business, allowing you to focus on running your business. Use Sunbelt Business Brokers’ business valuation calculator along the way to monitor the growth in your business’s value.

Business Brokers Help You Reach Your Goal

As a business owner, adding business brokers — and other professionals, such as attorneys and accountants — to your team may seem like an expense. However, it’s an investment in your company and your future.

One of the greatest specialties of business brokers, such as Sunbelt Business Brokers, is maintaining the confidentiality of sellers. Without confidentiality, word of a sale could get out, negatively impacting your business. Customers may start to buy elsewhere, employees may move to competitors, and buyers may lower their offers.

Onboarding business brokers early can keep you from wasting time and money trying to manage a sale on your own. With this assistance, you can continue operating your business to get to closing at the terms you want and for the best price possible.

Skilled Business Brokers Take the Time to Understand Your Business

As a business owner or founder, you might think no one knows your business as well as you do. However, when the time comes to sell your company, consider seeking out business brokers, such as Sunbelt Business Brokers.

Business brokers will take the time to get to know and understand you and your company, making them pivotal to maximizing the strategy and profitability of the sale.

Sunbelt Business Brokers has deep experience working with small and medium businesses, handling every detail of a sale from beginning to closing. That experience, combined with understanding your business, is key to getting you to close quickly and with the best possible sales price.

What Are Business Brokers?

Business brokers, often called intermediaries, are individuals or companies that can help you buy or sell a business. Selling a business can be a long and complex process and can take six months to a year.

Business brokers, such as Sunbelt Business Brokers, often know your industry and possess specialized skills to get you quickly from the thought of selling your business to being sold — and at a higher price than you may have expected.

How Understanding Your Business Helps

A key to a successful sale is bringing business brokers into your company long before you plan to sell. Skilled business brokers like Sunbelt Business Brokers use that time to listen, watch, learn, and provide objective guidance.

Here’s how that helps you optimize the sale of your business:

Valuation

While an online business valuation calculator can give you an estimate of what your business is worth, business brokers know an accurate business valuation takes skill. To get the most precise valuation, business brokers combine experience and specialized knowledge with a full understanding of your business and how it works.

Once you understand where your business’s value lies, you can work with your brokers to set a strategy for getting top dollar at closing.

Competitive Advantage

Skilled business brokers who take the time to understand your business know how the intangible assets can distinguish you from competitors, making your business more attractive to potential buyers. Consider these intangible assets:

• Intellectual property

• Brand recognition

• Customer loyalty

• Reputation

Knowledgeable business brokers know how to weave your intangible assets into a narrative that sets you apart in the marketplace and draws buyers to you.

Matching

Business brokers maintain a vast network and spend time with potential buyers. As a result, they have a deep understanding of the businesses those buyers are seeking. These business brokers can match you to buyers they are acquainted with in their network, giving you the possibility of reaching the negotiating table faster.

Selling a business you created and nurtured into a successful company can draw your emotions to the surface. Business brokers, who have handled many previous deals and now understand your business, can be an objective beacon to get you through to a better deal than you could have obtained on your own.

Understand What You Want From the Deal

When looking to maximize the profit from the sale of your business, reputable and skilled business brokers are willing to take the time to learn about you and your company to deliver that goal. So consider taking your time to know and understand the business brokers you plan to hire to sell your business.

4 Things New Owners Face After Buying an Operating Business

Purchasing an operating business has its advantages. You have an existing customer base, existing employees, and likely existing inventory as well. 

However, as experienced business brokers can tell you, purchasing an operating business comes with its challenges, too. Here’s a look at some of the difficulties you may face right after buying an established company.

1. Assessing Current Employees

Sometimes, purchasing a business with an existing team of employees can be advantageous. They already understand how the business works and can perform daily duties, which means you don’t have to invest time and money into recruitment and training.

However, it’s essential that you evaluate the current team to determine whether the existing employees are good for the business. If your team includes unmotivated employees or those who seem to go against the grain of the culture you’re trying to create, you may be better off dismissing them.

Evaluating the current team can also help you decide whether you need to hire more people to support growing operations. In some cases, you may also determine that you need to downsize.

2. Evaluating Efficiency

Even the most successful businesses can stand to become more efficient. One of the best things you can do right after buying an existing business is to conduct a thorough efficiency audit. The sooner you can start optimizing, the sooner you’re likely to see reduced expenditures and increased profits.

You also may want to track efficiency and growth moving forward. You can often accomplish this by looking at financial records or by periodically using a business valuation calculator to see whether your company’s total value has gone up.

3. Evaluating (and Maybe Overhauling) Technology

Some established businesses may not have updated the technology they’ve used in years. More often than not, updating technology can save you time and money. For example, a lot of newer tech allows you to automate payroll, customer notifications, and other functions. 

Of course, incorporating new technology might come with an upfront cost. You can end up paying more in terms of both the money it costs to purchase the tech and the time it takes to train your employees to use it.

4. Evaluating Business Relationships

In addition to other aspects of the existing business, you must also evaluate your relationships with vendors, suppliers, and other companies you may do business with. It’s particularly important to look at competitors to ensure you’re getting quality products for the best price. 

Keeping the same partnerships might seem easier. However, if you can find a better deal elsewhere, it’s worth the effort to make a transition.

Buying an Operating Business Can Be Challenging — but Worth It

When you buy an existing business, you have the opportunity to assess it and optimize it accordingly. However, implementing the necessary changes is often more complex than it sounds. The good news is that when you work with experienced business brokers, they can advise you on how to best move forward once the deal is finalized.

Business Brokers Let You Focus on Operations, Not Sales Negotiations

Whether you’re preparing to move on to your next business venture or getting ready to retire altogether, selling your business can be exciting. However, it takes more time, work, and business savvy to negotiate a sale than most people realize. 

Business brokers specialize in finding qualified buyers and making sure you get every penny your company is worth. But that’s far from the only benefit they can offer you. Here are several reasons why you can benefit from working with a business broker.

Negotiations Involve More Than You Think

Negotiating a sale price for a business isn’t like haggling over the price of a set of dishes at a yard sale. Typically, negotiations take time and involve several steps, including the following:

• Assembling financial information

• Having the business appraised

• Agreeing on contingencies (like buyer financing or transfer of office lease)

• Deciding whether the buyer wishes to keep the same staff on board

• Determining “covenants and promises” (like non-compete agreements)

• Planning transitions (like vendor contracts or ongoing projects)

If you have experience selling businesses, it may be possible to do so yourself. However, if you’re unfamiliar with the process, the buyer’s business broker may be able to take advantage of you. Business brokers handle sales on a daily basis, and they have the skills needed to build a deal that’s favorable to you.

Successful negotiations start before you even make contact with a buyer. Business brokers are uniquely equipped to appraise your business, assess the market, and decide on a reasonable asking price. 

A business valuation calculator can help you get a general idea of what your business is worth. However, for more precise valuations, you must rely on the expertise that brokers can offer.

When You Broker Handles Negotiations, You Have More Time for Your Business

Going through negotiations can be incredibly time-consuming. And if you’re involved in your company’s daily operations, that means you’ll have far less time to attend to your duties. When you’re trying to attract buyers, the last thing you need is a sudden dip in performance or revenue. 

Many buyers also ask business owners to make what’s called a “business as usual” promise while the sale is being finalized. That means the current owner must continue offering the same services, inventory, hours, etc. If you’re handling all negotiations, keeping the company functioning normally might be a real challenge.

If maintaining the business during negotiations proves to be difficult enough, the sale itself may be in jeopardy. If this buyer backs out, you’ll have to repeat the entire process again with a new one.

The Right Business Broker Makes All the Difference

A business broker can help you maximize your profits while still giving you enough time to focus on operations. Of course, you should carefully evaluate any business brokers you consider. 

It’s particularly important to make sure they have experience with companies in your industry. When you take the time to select the right broker, you’re making an investment in the success of your future sale.