People sell and buy businesses everyday – just take a peek into your newspaper’s classified and you will see all types of businesses being offered for sale. However, buyers and sellers both face problems if they are unfamiliar with the processes involved in the sale and purchase of a business. Business owners will want the best price they can get for their businesses. That’s understandable because they’ve put in years of hard work and money to build it up to where it is – and there is a certain sentimental value attached to their asking price. The buyer on the other hand, wants the lowest price he can get simply because he wants the best deal – after all, he knows he has a lot of expenses ahead of him as he starts out his new business. Pretty much like real estate agents, people approach business brokers for their knowledge and expertise in expediting a business sale transaction.
The Role Of A Business Broker
A business broker is an intermediary, bringing together buyers and sellers of businesses of all types – from beauty salons to florists to car washes and restaurants. Your primary responsibility is to get the best deal for both the buyer and seller and to walk them through the labyrinth of legal and administrative processes. You will need to have a solid understanding of business laws, finance and accounting and often, real estate practices. It is this expertise and knowledge that your client will be banking on to help them avoid making costly mistakes. A business broker is also one who objectively sells the good points of the seller’s business, while helping the buyer find the business that best meets their expectations. You will help both buyer and seller to understand the expectation of one another. This means that you will need strong negotiation skills, often walking a fine line between the needs and wants of both the buyer and seller.
To the business owner : Business owners engage a business broker to help them with the time-consuming task of pre-screening the genuine buyers from the window-shoppers. Seasoned business brokers have instincts gained over years of brokering that help them deal decisively with tire-kickers – indecisive enquirers who ask repeated questions with hardly any real intention in buying. The business broker does the background work to shortlist only the serious buyers with adequate financial resources and meet the necessary pre-requisites to run a business like theirs. The business broker also ensures the business is valued correctly, handles the negotiations and ensures the legal and administrative paperwork is properly processed in a timely, efficient and legal manner between lawyers, accountants, bankers, insurance agents and other parties, ensuring confidentiality at all times.
The cost in of engaging a business broker to help sell a business is worth it when you consider the messy tangles that can happen if legal and administrative mistakes are made. In the end, the seller might even end up having to contract a business broker to clean up the mess after all. The commissions paid to the business broker is like an insurance fee that protects the seller against accidents and gives them peace of mind.
To the buyer – especially if it’s their first experience buying a business – brokers are crucial . Buyers may have read books and visited websites and gotten lots of information, but if buyers don’t know what to do with all that information, it’s still pretty much useless information. There’s nothing like having a broker who has had years of hand-on experience in the negotiation and legal aspects of buying and selling businesses to walk the buyer through the process and give them peace of mind, knowing that there’s someone they can turn to when in doubt.
Looking for a business to buy can be a daunting experience. There’s so much to consider, so much to do. A business broker will help keep the buyer on the right track, asking the right questions and getting a clear understanding of the buyer’s expectations. The business broker helps crystalize the buyers thoughts and dreams into a realistic plan. He will pre-screen businesses for sale that fit the buyer’s parameters, including industry, location, setup and size. Buyers won’t need to worry about the hidden risks of going it alone, like finding out too late the seller failed to disclose information that will have legal, administrative and other ramifications.
Buyers also benefit from having someone who can negotiate convincingly for them, making sure that a fair price is reached, then ensures the legal and administrative paperwork is done properly for licensing, permits, legal and financial issues. Since brokers are familiar with the law and regulations pertaining to buying a business, and how to cut through the red tape, working with a business broker can save the buyer a lot of time and help the buyer get off to an earlier start running his new business.
Your Business Broker Office Setup
You only need a basic office setup to run your Business Broker business. Today’s technology has made it easy to get into the business, turning their mobile devices into a “virtual office” that they can take with them anywhere they go. However, a physical office or base is still important to a business broker. Here are some office setups for a business broker :
- Working in an existing business brokerage office.
This means you apply for a formal position as an associate or agent in a brokerage office.
- Open your own office and work as a sole practitioner.
Going solo is ideal if you are doing business brokerage on a part-time basis.
- Open your own office and recruit your own agents.
This is the obvious step for a successful business broker who has a steady stream of business.
- Working in a “shared office” complex.
Many freelance executive lower their costs by setting up office in a shared office complex where you can “rent” office space but have access to shared facilities.
- Working independently in a home office.
This option is great for brokers who are Moms or Dads who want to be closer to their family.
|What is a Business Broker
Short, informative video on Business Brokers
by Steve Harvey of BusinessFindersCanada.com
|Are You Thinking About Becoming a Business Broker?
Nathan Goldstein of VestedBB.com answers your questions if you’re thinking of becoming a business broker.
|Testimonials From Business Brokers
A short video of business brokers who joined a turnkey program at MurphyFranchise.com.
Franchise & Turnkey Programs
- MurphyFranchise : Murphy Business & Financial provides a turnkey program that provides you with all of the tools you need to help people buy and sell businesses.
- VestedBB : Business brokerage and training program.
- VRBusinessBrokers : Offers a business broker franchise opportunity