4 Important Pieces of Information a Business Broker Needs to Know
If you want to make selling your business as seamless — and profitable — as possible, your best bet is to work with a business broker. Working with a broker is a partnership, and if you want to get the most out of that working relationship, you should make sure your broker has all the information they need to execute a successful sale. Here are some of the most important things your broker needs to know.
1. Your Business’s Value
Business brokers are experts when it comes to getting business owners top dollar for their companies. To make sure you get as much as you can for your business, your broker will need to know the value of your company.
If you’ve ever used a business valuation calculator, you probably had to enter details from your profit and loss statements, your tax returns, or both. Calculators give you a general sense of your business’s value, but your broker will look closely at your business, take industry trends into account, and determine a more precise valuation. It might seem like an involved process, but an accurate valuation is an absolute must.
2. Your Business’s Existing Contracts
Most businesses don’t operate in a vacuum. Your business is connected to other companies — vendors, realty companies, subcontractors, and more. Before showing your business to would-be buyers, your broker needs to have documentation of contracts like these:
Lease agreements
Vendor contracts
Agreements with freelancers or contractors
Operating agreements
Equipment leases
Licensing agreements
Business brokers don’t simply need to know about these contracts. They need to have them in order and ready to show interested buyers. If someone wants to purchase your business but finds that your broker doesn’t have the necessary documentation in order, they’ll likely look elsewhere.
3. A Marketing Plan
Before the broker lists your business, make sure you agree on a marketing budget. Business brokers generally have networks of interested buyers, so they may not need to invest substantial funds into advertising. Talk to your broker to ensure they have a clear marketing plan. Are there multiple people in their existing network who may be interested? Will they be listing your business for sale? If so, where?
4. Your Communication Expectations
Good business brokers always respond promptly to potential buyers. But when it comes to communications between you and your broker, you should discuss expectations ahead of time to make sure you’re on the same page. Some sellers might want daily or weekly updates. Others might want to get a call anytime someone has shown interest in the business.
Whatever your communication preferences, it’s wise to have regular check-ins with your broker to ensure you’re in the loop.
Your Business Broker and You: A Partnership for Success
Selling any business is an involved process, but the right business broker can make it easier. When you maintain open communication with your broker and make sure they have all the information concerning your business — and your expectations for the process — you’ll be well on your way to a successful sale.