10 Reasons using a broker to sell your business works. Not all business brokers are alike. But at Elan Capital, we know the small business market.
There are a lot of qualities that make up a good business broker. There are even more qualities that make up a great broker. But when it comes to selling your business, here are just a few things a professional broker brings to the table when you are using a broker to sell your business.
10 Reasons Using a Broker to Sell Your Business Works – Elan Capital
Accurate Valuation
A smart broker will start by producing an effective, detailed financial analysis of your company in order to portray an accurate, yet attractive picture of your earnings. Then we will work to clearly demonstrate the true profitability valuations of your company. That net income line on your business tax return is for tax purposes and does not accurately portray how much money your business makes. Elan will prove to the buyer the true cash flow position of your business.
They Know the Drill
For a small business sale, know that the paperwork is astounding. Selling a business, no matter how small, requires a tremendous amount of paperwork and document chasing. A good broker knows the drill. And small details never trip you up at the end.
Like a Good Fly Fisher
A good broker knows all the streams where potential buyers are fishing. Your broker should be anonymously teasing you globally, so there is less risk of missing that one buyer that could be a perfect fit. A good business broker will know how to produce a professional presentation package of your company (a perfectly tied fly) that gets hits. Why? First impressions matter.
Confidentiality
When selling the business yourself, you risk employees discovering their jobs are for sale. A broker advertises your business anonymously and your receptionist is not taking calls “about the business you are selling”. At Elan Capital, we require that potential buyers sign a Non-Disclosure Agreement (NDA) before we proceed with providing any additional information, because we don’t want to reveal who is for sale until we are sure that the buyer is financially qualified to proceed.
Bringing You a Buyer is the Start of the Process, Not the End.
The sale is only starting when the letter of intent is signed. This is when the buyer will start their due diligence. Great brokers roll up their sleeves and run the due diligence process for you. Elan is fully aware that selling businesses is not your day job. It’s ours. At Elan Capital, we make the process as painless to you as possible.
You Now Have a Financial Adviser
Nobody will ever tell you selling a business is easy. If fact, it’s pretty tough. Your accountant or even your attorney may be solid members on your team, but they don’t have experience navigating a business sale. We do. A good broker can structure the deal to your favor and help you through the tax implications of the transaction.
They Close Deals
Fact: Not every business sells. Another Fact: Not every business should try to sell. But the one asset that every good business broker has is closing. If there is a chance you can sell and get top dollar for years and years of work, it’s time to call in the closer. When two emotionally charged people (the seller and the buyer) reach an impasse, 9 times out of 10, it’s the broker who helps moves past the objections, and get the sale back on track. Brokers close business.
Funding
Often, a highly motivated buyer may need help with some financing to complete the sale. At Elan Capital, we know business funding, and this can help get you the maximum amount of money at the closing. We work with dozens of lenders that can work with buyers and get the deal done.
Lets You Run Your Business
Hiring a competent broker allows you to continue to run your business. If you try to sell your business yourself, you can be distracted from your day-to-day activity investigating ways to market your company to an interested buyer, and start paying less and less attention to the business. Let the broker do what they do best and you do what you do best.
They Understand the Negotiation Process
You may not realize it, but from the morning you woke up and said “I’m selling”, you have started the negotiation. While every deal had negotiating back and forth, a good broker knows what battles to fight and which fields to die on, without ever losing sight of the ultimate goal of getting the best value for their client.
Business brokers get paid a fee that is contingent on you successfully selling your business, so brokers do take on some risk with you. Their risk is that they end up working really hard and the deal just doesn’t close. Therefore, they are motivated to get deals closed, and the best not only get them closed, they get them done right.
Summary
When it comes time to sell a small or medium-sized business, most every business owner will benefit from working with an experienced business broker. Although it’s possible to sell your business on your own, few business owners have the necessary experience and time to market/ execute a successful business transaction while simultaneously operating and growing their business, a critical focus when selling a business.
Elan can maximize the business sale outcome. By leveraging the expertise of business transfer experts, sellers can concentrate on keeping their companies strong, which ultimately results in a higher sale price for your business.
There are countless details Elan Capital, or any good broker, will manage throughout the sale process. However, you should also make sure that your broker will help manage the emotions of the sale, by clarifying your sale goals early in the process and negotiating the sale to facilitate a smooth exit from your business.
If you are planning on selling a business, give us a call for a consultation. Elan Capital, Inc is full service business broker headquartered in Dallas, Texas.