Before Appointing a Business Broker

15 Feb 2017 11:24 AMTroy Potter
Before Appointing a Business Broker




Three Questions to Ask yourself before Appointing a Business Broker :


1. Do you have the time to sell your own business ?

It can be very time consuming to run a business sale and extremely difficult to do it properly

if you are trying to run a business at the same time. You could be dealing with 10's or 100's of

initial enquiries by phone and email which you the need to qualify into real potential buyers

or people who are just curious.


Once you know who to spend time on you then need to spend time with buyers to fully

answer their questions and to make sure they understand what they are buying. If not, you will

put a lot of time into a potential sale that never achieves a successful outcome for you.


When a buyer is found you will need to run inspections and negotiate terms. This is not

all about the price, it is also very important to set the terms of the sale so they can be put

into a contract. A common mistake is to leave contracts till the last minute assuming it is

just a legal process when in fact it is you most valuable tool in finalising a sale and controlling

the time you invest in doing so.


2. Are you the right person to sell your business ?

You probably know your business better than anyone else but that doesn't mean you're

the best person to sell it. Dealing with potential buyers requires the ability to look at the

business from their perspective and to look at the business sale with an objective eye in order

to understand what is a real barrier to the sale proceeding and what isn't.


It is also important to manage the time spent on discovery by the purchaser and any Due

Diligence undertaken pre-contract. Most business owners like to talk about their businesses

and can spend too much time explaining day to day operations in minute detail rather than

listening to buyers and looking out for what the buyer really wants to know.


3. Do you have the tools and resources you need ?

Of course you can pay for an advert on a well trafficked business for sale website. It will be more expensive than

advertising through a Broker who should have access to multiple channels but you will start getting calls.


The real challenge is whether any of these calls will be genuine potential buyers. In order to make

the best use of you time receiving enquiries you should use tools and resources that help eliminate

unnecessary contact with buyers who are never going to proceed.


These include :

- buyer profiling to make sure the ads target the right buyer, not the mist number of enquiries.

- Bulk Listing to multiple websites.

- Quality Information Memorandum to reduce the time spent on intial enquiries

- Register of buyers cross referenced to their other business sale enquiries

- Contract and Offer templates including special condition terms to overcome barriers

- Targeted Mailing Lists


A good Broker should be able to do all of the above for you. You should be paying them to run the

sale for you not just to introduce a buyer. If you can acheive the same outcome in the same time frame

then you should consider running the sale yourself. If you don't have the time, skills and resources

to do the job properly then a professional business broker would a good investment of you time and money.


For a full appreciation of the business Sales process please download our free ebook - link below.

                                          Managing the Sale of your Business