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How Does a Business Broker Get a Better Price for My Business?

If you’re selling your business (or even just considering it), you might have heard people tell you to work with a business broker. You also might understandably hesitate — why hire someone and pay a commission when you could just sell your business yourself?

You may not realize that a good business broker can often get you a better price for your business. Even when you factor in the broker’s commission, you still end up with a larger profit than you would if you sold your business yourself.

How can a business broker convince a buyer to pay so much more? Here’s a closer look.

They Can Accurately Value Your Business

A business valuation calculator can give you a quick idea of what your business may be worth. However, when it comes to selling, you want your valuation to be as detailed and accurate as possible. 

If you set the price too low, you could miss out on thousands. But if you set it too high, you’ll waste time marketing it before you realize you’ll need to drop the price.

Business brokers are experts at valuing businesses. They’re also attuned to market trends and know what features of a business may make it worth paying a premium for.

They Have Access to a Pool of Buyers

Business brokers will usually maintain a list of people who are actively looking to purchase businesses. More potential buyers generate more competition, and that puts you in a place to possibly receive offers above the asking price.

They’re Expert Negotiators

In virtually every case, selling a business involves negotiating the price, the terms and conditions of the sale, or both. If you aren’t experienced when it comes to negotiating the sale of a business, you might find this step hard to navigate. There’s also a very real possibility that you’ll lose money by agreeing to unreasonable terms. 

When you work with a business broker, you’ll have an advocate during this critical process. Your business broker can handle negotiations for you while representing your best interests.

They Keep Everything Confidential

If you sell your business on your own, it’s nearly impossible to avoid the word getting out. If this happens, your employees may quit because they’re worried their jobs are in jeopardy. Your existing client base may be tempted to go elsewhere, and some of your trade secrets may be revealed.

Business brokers are experts at maintaining confidentiality throughout the sales process. When you work with one, you can avoid arousing suspicion — and all the complications that come with it.

Should You Hire a Business Broker?

Choosing whether you should work with a business broker is just one of the many decisions you’ll make as a part of selling your business. It’s not a decision you should make lightly — it’s a choice that can dramatically affect your business’s final sale price.

Ultimately, unless you already have extensive experience selling businesses, working with a broker makes the process easier and is also likely to get you the greatest profit.

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Understanding Your Business Is Critical for Business Brokers

Are you selling your business? You likely already know that hiring a business broker can make the difference between a good sale and a great one. However, you shouldn’t hire just any business broker. If you want to get the best sale price possible, it’s imperative that business brokers understand your business. Here’s why.

They Can Get an Accurate Valuation

Easy online valuation calculators can give you a general idea of your business’s worth. But if you want to get a great sale price, you need a highly specific, accurate valuation. Valuing a business is an art, and it takes a skilled business broker to do it. If a business broker doesn’t have a deep understanding of your business and how it works, it will be impossible for them to get the most accurate valuation possible.

They Can Grasp the Value of Intangibles

Profit margins and your balance sheet aren’t the only things that influence your business’s sale price and how a broker markets it. There are many so-called “intangible” factors that you can’t attach a monetary value to — but they still make a difference in the overall worth of your business. Here are some examples:

  • Customer loyalty

  • Brand recognition

  • Goodwill between your business and others

  • Copyrights or patents

Intangibles can lure in potential buyers, so business brokers should have a solid understanding of the intangibles of your business.

They Have a Feel for Which Buyers Might Be Interested

A good business broker makes it their mission to understand your business, and they take time to understand what buyers want. Selling a business isn’t like selling a car. Buyers usually don’t contact business brokers out of the blue in response to an ad. Instead, brokers maintain a network of interested buyers. 

When they understand both your business and their potential buyers, they can nudge promising buyers toward your business and increase your chances of a fast, profitable sale.

They Can Be Unbiased

You know your business better than anyone. However, for business owners — and especially owner-operators — emotions often get in the way, at least to some extent. Even if you think you’re being perfectly objective, there’s a good chance that your emotions are influencing you on a subconscious level.

That’s a natural reaction when you’re selling something that has long been a major part of your life. However, to negotiate a deal effectively, you need someone with an objective view of your business. When a broker takes the time to understand your business and combines that understanding with objectivity, you’ll be well on your way to a successful sale.

Take the Time to Choose the Right Broker

Selling a business is a complex venture, and in virtually every case, it’s beneficial to have a broker. Don’t rush your selection process! Choosing a broker who’s willing to really get to know your business is essential, and it takes a skilled and motivated broker to do that well. With a quality broker by your side, you dramatically increase your chances of a deal that suits you.

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