Entrepreneurs who are able to start a business from the ground up and sustain said business into real profitability are a rare breed. This causes the very common occurrence of small business owners selling their venture to another business or corporation because they can no longer handle the operations of their business. Although the motivation for sale may be different than this example, a business broker is an essential part of the process for anyone without extensive knowledge of the ins and outs of buying or selling a business.
A business broker provides a seller quite a few useful services. The first thing a broker does is to estimate the value of the business in question. After that, they publish a listing of the business so that possible buyers will see that it is, indeed, for sale. This can be compared to the service of a real estate broker, because both have the main purpose of making the home, or business in this case, visible to those who are already in the market.
Before bringing potential buyers to a seller’s attention, a broker will screen multiple buyers to see that they are able to follow through with the purchase of the business. Basically, a broker is there to facilitate for the seller some of the more complicated processes that are involved with selling a business.
Even though many buyers may understand the process of buying a business more fully than certain sellers, they can still benefit from the help of a business broker. One essential service that business brokers provide for buyers is to give them a report about history and profitability of the business that is for sale. Buyers often enlist the help of business brokers in order to find businesses for sale that are aligned with the buyer’s needs and interests.
Brokers deal with some of the smaller nuances involved in selling a business that the involved parties cannot tend to for whatever reason. For instance, a broker working for a buyer will make sure that the business in which they are interested does not rely on illegal activities or exhibit any other major flaw. Because the sale of a business often involves so many legal issues, a broker is helpful to both sides by handling and explaining thing like contracts and tax related problems.
- Why Should You Hire a Business Broker? - July 31, 2012