7 things to keep in mind while dealing with business purpose
- BY Sanjana Surbhi
Feature Writer, BusinessEx
- May 23,2018
- 20 Mins Read
Most of the new start-ups fail during first two years of operation. To save their businesses, entrepreneurs sometimes plan to sell it. In the year 2017, the company BizBuySell recorded 9,919 sales, up from 7,842 in 2016. A nearly 27% increase from the previous year. Selling a business is not easy. It takes its own sweet time.
But first, you need to answer why do you want to sell your business? This will be one of the most common questions asked by your buyers. So, sort out the reasons for selling your business.
General reasons for selling a business:
- New opportunities
- Poor performance
- For a break/change
Followed by this you need a professional broker who can help in getting a reasonable price and sell your business in a limited time period. Who is a business broker?
A broker is a person who acts as a transfer agent or intermediaries who can help and assist you in buying and selling a business or deal. They will charge you money for the service provided. According to a website, they will estimate the value of the business; advertise it for sale with or without disclosing its identity. Both, the number of startups-and brokers have increased. Selling or buying a business can be a very important decision that might change your life.
How does a business broker work?
Brokers play a valuable role by offering you advice, guidance and other resources that required for the transaction. They are well connected with professionals, accountants and other important personalities of your industry and will act as intermediaries. They will advertise your business on their websites and later deal with the buyer for your business. They do all the legwork needed for the sale of the business. In exchange for coordinating these transactions, a broker will charge 10% commission.
So here are seven things to keep in while dealing with a business broker.
- Experience Before hiring any broker, check the years of their experience. Keep a track of how many deals they have cracked till now and how are they functioning. You can ask them about it by directly questioning them or check their website if they have any. You can also talk to the old clients. Anyway, a broker will show their capabilities and achievements to impress you. So, check their background before taking any further steps.
- Service Charge No one works for free and so does the broker. He will ask for a commission based on a portion of the price paid at closing for your business. Usually, the commission is 10 percent. Do ask them what other fees he will charge. You must be clear on the money aspects.
- Web presence Check the website of your broker. From a website, you can get to know a lot of things. Try using it and check how it works, is it simple to use and all what all businesses it offers.
- Broker's qualification Here, from qualification I meant, whether it is certified or not. Verify its membership. Also, see its customer base if possible.
- Connections A broker with many contacts will bring you more offers. Select a business broker who has good connections in your industry so that you can have options and better deals.
- Take interest in your deal It’s a duty of the broker to take interest in assisting you. He must inform you about all the deals that come up to them and help you in price negotiation. Many fraud brokers are out there. So, you need to be careful and always go with a reputed broker.
- Have a look at the marketing plan You need to have a marketing planning to sell a business. A responsible broker will definitely have a marketing plan. See the plan and strategies and also check whether they are able to make you understand or not. Think as a buyer and then act accordingly.
- Besides all these, keep in mind that the broker is your representative and only he can help you by providing buyers and too from your industry. There should not be any communication gap; it’s the duty of your broker to communicate properly.
So, to get the best buyer you need to have the best broker who must be proactive and communicative. And keep the above points in mind to find the best broker.
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