When someone is looking to sell their business, or become a small business owner by purchasing a business, they often don’t know where or how to start the process. An effective business broker can add significant value to both parties in the transaction, but only if the broker is effective. There are four key attributes that define a great business broker, and all are equally important to ensure that the process goes smoothly.
1. Do they listen to you?
A good business broker should be first and foremost a good listener. Whether you are looking to sell your business or find a business to purchase, you need to express your needs and wants, and the broker should listen. That does not mean that they will do whatever you ask them, but rather they will provide valuable guidance based on the information you have provided to them. A good business broker will also be responsive to your needs as their client, and provide you with the attention you deserve. Without effective communication, the relationship will not work, and you will not successfully achieve your goals.
2. Do they have a high level of confidentiality and integrity?
The last thing that you want when you are selling your business is for too many people to find out about it. A good broker will market your business in such a way that it will be difficult for your employees, vendors, customers, neighbors and competitors to know that your business is for sale. The best way for a business owner to maintain the value of their business is to KEEP RUNNING IT as if nothing has changed.
Integrity is also a critical attribute of an effective business broker. You want the broker to be honest with you and with the parties on the other side of the table (seller and purchaser), so that a fair deal is negotiated for everyone involved. An effective broker will also be willing to provide unbiased information about your business, ask appropriate questions, and maintain the highest level of ethics and transparency, even if that means providing you with information that is not favorable. At the end of the day, a good deal happens when all parties have been honest with each other.
3. Do they have the analytical skills to properly evaluate a business?
A good business broker will have the resources to provide a seller with an unbiased opinion of the value of your business. They should have the resources available to them to review the financial information, obtain industry comparable value, and evaluate other factors to determine the best listing price for the business. In addition, a good broker will be realistic with sellers by defining with that business will be worth in the market. The key to determining the best asking price for a business combines many factors, one of the more important ones is what a willing buyer will pay, even if that amount is less than the seller thinks the business is worth. A good broker will also make recommendations as to what the seller can do in the short term to increase the value of the business—making it ready for sale at a later time.
4. Do they understand the emotions involved in selling and/or purchasing a business?
For most small business owners, their business is like their baby. They have invested significant time in developing the business, know the clients, and have made significant sacrifices to ensure the success fo the business. In addition, the purchaser is making a significant investment, often while making a life-changing decision to become a small business owner. Therefore, selling a business is a highly emotional process.
A good business broker will work as an impartial intermediary to keep the appropriate information flowing between a seller and purchaser, while also de-fusing the emotions that can run high during the due diligence and closing process. They will also provide support to both sides to ensure that the closing takes place smoothly and in a timely manner. Whether that means ensuring that the inventory walk-through prior to close takes place properly, assisting in negotiations with the landlord, or helping the buyer obtain the appropriate financing, an effective business broker will be there for both parties throughout the process. And once all the closing papers are signed, a good broker will help facilitate a smooth transfer of ownership.
At Transworld Business Advisors of Utah County, we are able to provide the high level of service to ensure that all of the four questions above are answered with an unequivocal “yes”!!! What differentiates us is that we help guide our clients through a major business transition by understanding both the mechanics and psychological components of this life-changing decision, for both seller and purchaser.
At the end of the day, our goal is to close Good Deals for Good People.
Email us at utahcounty@tworld.com or call us at (801)753-5655 to learn more!
