Why do I need a business broker to list my business for sale?

Getting your business ready to list-for-sale is specialized work.

There are dozens of steps that need to be taken to successfully list and sell a small business. In the same way that you rely on a realtor to prepare to list and sell your home; you need the services of an experienced business broker to prepare to list and sell your business for the best possible return.

There are six key steps in getting your business ready to list: Assembling documentation, recasting financials, determining value, preparing a CBR, developing an approved business marketing plan and then activating marketing channels. All are important steps that should be handled by a professional.

Assembling Documentation is the first step. Just as assembling information for your tax advisor or lawyer requires preparation, so does getting documentation together for the possible sale of your business. You should work with a broker who has experience in putting deals together and knowledge of your industry and your market.

Getting you the best possible outcome – with the easiest possible process – begins with documentation that has been assembled at the direction of an experienced broker.

Recasting Financials is how a good broker—one who knows your industry and your marketplace—will be able to put together a financial history and representation that brings out the best of your business.  And this leads directly to one of the most important steps in the process: determining the value of your business and assets to be sold.

A good broker who knows your industry and your market, who has a handle on how other businesses are selling, and who knows what the trends in the marketplace are can help you answer one of the most important questions in this process: What is your business worth?

Preparation of a Confidential Business Review will provide the basis for your business value—how it will be marketed and communicated to buyers in the marketplace. Again, the experience of a business broker is critical in getting all the right information together in exactly the best possible way.

Finally, once you give your broker your approval of the marketing plan, your listing will be activated on marketing channels. This is a major step in the selling process which can be effectively executed only by an experienced broker.

I like to tell all the business owners I work with that their personal attorneys and accountants – helpful to them in so many ways – don’t usually have the experience necessary to think through the many aspects of packaging up a business listing. So, while they are frequently trusted personal or business advisors, they lack the expertise required to help advance your listing and ultimately sell your business.

Selling your business—your life’s work—is one of the most important decisions you will ever make. Taking advantage of the expertise of an experienced business broker is one of the best investments you can make in the sale of your business.

Another reminder about capital gains taxes!

The anticipated capital gains tax increase from 20% to 39.6% will have huge potential impact on what you can make from the sale of your business. Right now, buyer activity is high - it’s a seller’s market! And because of COVID-19, there’s pent-up capital for the right business opportunity in which to invest, and many businesses are SELLING at a PREMIUM. 

But don’t go it alone. Contact an experienced business broker before you list your business.

Aaron Thom, California Business Advisors, Inc.