Business owners are a pretty self sufficient bunch. We learn to do things to save money, we learn to do things because there is no one else to do them. You are probably the most capable person at your business. You’ve probably also developed a lot of self-confidence. You feel you can do almost anything.
When it comes to selling the business that you’ve worked to build, it’s worth it to hire a professional, someone who has the expertise and experience to get the job done right. There is too much at stake to risk making it a do-it-yourself project. Selling your business is one of those things that requires the experience of a professional. Here are just a few of the reasons why you shouldn’t attempt a for-sale-by-owner (FSBO):
10. Maintaining Confidentiality. Maintaining confidentiality is essential when selling your business. How do you maintain confidentiality and vet potential buyers without revealing your identity if you are dealing directly with buyers? You can’t. You need an intermediary between you and the buyer. A business broker, as someone who is not involved with the business, vets leads and qualifies buyers.
8. It takes time better spent elsewhere. Selling a business takes a lot of time. Marketing presentations take time to prepare. Dealing with multiple buyers take time. Meanwhile, you’re trying to run the business and live your life. Do you really have the extra time to spend your precious hours selling your business when someone else can do it for you?
7. You don’t have the expertise. Selling a business requires many different types of expertise. You need to be very knowledgeable about financial statements and how businesses are valued. You need to know about the legal process involved when a business is sold. You need to know what you can do and should let your attorney do. You may have a very good attorney and accountant, but they do not have the same expertise as a business broker when it comes to selling a business.
6. Acting as your own salesman typically backfires. If you don’t have good sales skills, you definitely should not be selling your own business. But, even if you are a good salesman, there is a good reason not to sell your own business. The more you pursue a buyer, the more you are sending a message that you are desperate to sell which will tend to make the buyer think that they can pay less for the business. Since it is a business broker’s job to pursue buyers, doing so doesn’t send the same message.
5. Your marketing doesn’t match that of a good business broker. Sure, you can advertise on a few of the Internet business-for-sale websites, but a good business broker has many more ways to sell the business – an effective website, a buyer database, a co-broke group, and reaching out, confidentially, to industry buyers. The result: The business broker is likely to reach more buyers resulting in a faster sale at a higher price.
4. A business broker acts as a buffer. Buying or selling a business is very stressful and takes a lot of time. During that time, the buyer and seller are likely to get upset with each other and things may be said that would kill the deal if they were said directly to the other party. The business broker is a buffer between the parties that prevents these deal-killers.
3. There is much more to completing a sale than accepting an offer. Accepting an offer to buy the business is only the first step to closing the sale. Typically, there is due diligence, the seller obtaining financing, negotiating a lease with the landlord, and drafting a purchase and sale agreement. There may also be transferring a franchise or liquor license, or other things that need to be done. Much of the time involved in selling a business is expended while it is under agreement. A business broker helps the buyer to buy the business.
2. You need a trusted advisor. Your attorney and accountant may be very skilled and knowledgeable, but most don’t have the knowledge about the marketplace and selling businesses that is needed. A good business broker can advise you during the process and help you avoid making a major mistake that will cost you a lot. Also, a buyer is more willing to accept what a business broker suggests since they have developed a relationship with the business broker, rather than what your attorney or accountant suggest who they don’t know and who they see as being strictly on your side.
1. Selling Your Business Faster For the Best Price. This reason alone should be enough to move any seller towards using a business broker. Selling a business is both tedious and stressful, and the only reason to undertake such an endeavor on your own would be to save money. But when it comes to selling a business, do-it-yourselfers typically get a lower price for their business. Why is that? Brokers can reach a greater number of prospective buyers who compete on price. Because they widen the field, a broker usually more than makes up for their commission with a higher sales price, providing the seller with a higher take-home figure.
Some sellers have opted to serve as their own broker, only to find the process much more complicated and time consuming than they anticipated. Business deals are complex transactions that require expertise well beyond what the average business owner has.
A business broker is your advisor, your knowledge bank, your marketing team, and your expert negotiator, all wrapped up in one.
