If you are feeling it’s the proper time to sell. Your next biggest decision is going to be whether to use a business broker or to try to do it yourself. The simplest choice for you will depend upon your resources and financial situation.
There are pros and cons of appointing an expert advisor to assist you to sell your business versus going it alone – and there’s more to it than getting expert advice versus saving money.
Primarily, choosing to DIY means you’ll, by necessity, take your eyes off running the business.
If your business doesn’t sell quickly. – Or at all – You not only will have lost focus on running your business. You’ll miss out on important opportunities, especially those connected to keeping performance and profits healthy.
Not all business brokers are created equal. It’s worth conducting your own investigation and due diligence before appointing a broker.
Ask your business networks and industry associations to suggest a business broker.
Selling your business yourself
It’s never been simpler to sell a business on your own. If you opt to go it alone, you’ll avoid paying broker commissions, but be prepared to invest your own time and energy into the sales process. The more organized you’re, the less impact the sales process will have on the day-to-day running of your business.
To sell your business independently you’ll need to sort out your business documents, advertise your business for sale, manage interested buyer inquiries, and arrange the ultimate sales paperwork together with your lawyer and accountant.
Choose the right broker
If you decide to use the services of a broker to sell your business, you will need to ask them a few questions and take note of a few things before you sign on the dotted line. Some of those are:
What’s the broker’s marketing strategy?
Request for a detailed plan that a broker will action to advertise the business, solicit buyers, and achieve visibility.
If their strategy is simply to write an online listing, then there’s only limited added value and you may consider doing it yourself.
Request copies of profiles they have developed for other customers. Expect the pros and cons of the business profiled.
What are their other sales successes and failures?
Ask the broker for the names of a minimum of 10 sellers with whom they have worked and get in touch with them.
If an owner will offer you a positive review of a broker no matter whether the business was sold or not, it speaks volumes about the broker’s ability and ethics.
What do they communicate in their first meeting with you?
A ‘churn and burn’ broker is the one who will pressure you to register for a listing in your first meeting.
Don’t fall for it. Many listings don’t make an excellent business broker.
Instead, expect to be asked many questions about the business you’re selling. You want a broker whose primary agenda is to find out about your business because then he or she is going to be best equipped to sell it.
Asking you questions in an effort to get to know the ins and outs of your business is a good sign, as is a willingness to invest time with you in follow-up meetings.
Also, they must be presenting questions to you that a buyer will request.
You want them to honestly express whether or not they feel your business may be sold.
The value in an intermediary
Using a broker can make a deal flow better and ease communication. – Especially if you need to take a firm stance because it means you have somebody else in your corner to deliver any bad news.
However, too much intercession can work against you when negotiating a purchase. So don’t be afraid to combine broker communications with DIY.
To get any buyer comfortable enough to create a proposal, they need all their questions answered and will seek assurances that you are going to be there for an effective transition period.
The more confidence and trust you instill in the buyer, the greater your chances of making the sale.
It’s difficult to create this credibility through a third-party broker alone, so ensure you involve yourself in crucial communications.
Other questions and points to think about when deciding to DIY or retain a business broker
How much are you willing to pay for the work of a business broker?
Will you feel a lack of control over the process if you are used to doing everything yourself?
A broker may pressure you to accept a contract you are not pleased with.
A broker may pressure you to accept a cheaper price so they can get their fee, which is sometimes a percentage of the sale price, rather than risking the deal falling through.
How many customers is the broker currently working with? Do they have time to correctly represent your business?
Find out the way to negotiate successfully.
Once you’ve decided whether to appoint a business broker or go it alone, it’s time to organize your business for sale.
Ready to hire the services of a business broker? Take a look at our proven business selling process.