Selling a business could be one of the biggest decisions an owner makes in his/her business career.
Once selling the business has been given the green light, the next matter to resolve is whether to sell privately or through a business broker.
Here are some things to consider before deciding;
How much time do you have?
Selling a business takes time; it involves lots of emails, phone calls, and site inspections. Generally, it takes five to eight months. Some businesses will take longer to sell, while others will sell in a shorter period. Sellers should always consider the time they have available, or the time frame they need to complete the sale.
Using the services of a Business Broker will allow the business owner to continue focusing on running the business, reducing the likelihood of erosion during the sale process.
Brokers also pre-screen buyers to determine if they are financially qualified to purchase a business. This means that sellers will only have to deal with those that are really serious about the business; Private sales would be required to handle every enquiry, serious or not.
Can you control your nerves and emotions?
Buyers are more likely to trust sales conducted through a broker, more than those sold directly from the business owner. Buyers can be put off if the marketing focuses too much on the benefits and the day to day operations of their business.
The negotiation stage is an exciting stage; however, professionalism must be maintained. The Business Broker will be able to use their skills to keep the buyer engaged to pay the maximum price for the business, and ensure a great deal is negotiated for the business owner.
What skills do you have?
Good brokers have the skill of converting clients from previous enquiries, to buyers of current listings. They are also able to determine the best marketing methods to reach a broad base of prospective buyers, at the lowest possible cost. Brokers also have access to websites and databases that the public don’t have.
Facts presented through Information Memorandums, Business Profiles and Due Diligence investigations created by brokers, give buyers more confidence than those provided by an owner with a vested interest in the business.
Can you think outside the square with your business?
Getting an understanding of a business’ worth, is essential when considering selling a business. Business owners may be surprised to discover, that what they believe their business is worth and what buyers think, are two different figures.
Valuing your business
Working out the value of a business is an important part of the sale process. Engaging a professional to do this will ensure that any specific industry methods relevant to the business are applied.
Increasing the value of your business
A well maintained facility will get the best price. A business broker will look to find ways in which you can increase the value of your business. For example, they will be able to recommend things such as a thorough clean and a review of organisational systems; something that may be missed in a private sale.
How much do you have to spend on selling the business yourself?
Selling a business privately will appear to cost less than using a business broker, however when you take into consideration the preparation, marketing and contract stage the results can be surprising.
Brokers aim to achieve a higher sale price, therefore covering their commission and associated legal advice.
This decision depends largely on your situation. Here at The Brokerage Australia, we understand that not every business is the same, and may require a different approach. Check out our options for selling your business using our broker services, and privately with our help.
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