Working with a business broker on the sale of a business

Don’t list your business without the help of a good business broker.

Selling a business is usually one of the most complicated transactions that anyone can ever experience in their lifetime. There are – literally – dozens of steps that need to be successfully taken to not only list a business for sale, but to market (promote) the business, take offers, negotiation the sale, and then close the deal. These are all important steps best left to an experienced, licensed business broker.

The four steps in selling your business – listing the business, packaging the listing for sale, marketing and offer selection, due diligence and closing the sale – all have important steps that should be handled by a professional.

Consider the listing process by itself. 

A good broker who knows your industry and your marketplace will be able to put together a marketing plan that will ensure the most successful outcome possible. After an initial listing meeting, which will introduce you to the various steps involved in selling the business, you will need to collect all relevant financial information. Your broker knows what facts are important and how your financial history needs to be packaged up to attract the right buyer. Assembling your financials is an important step in the selling process, best overseen by an experienced broker.

Probably one of the most important steps in the process – and one that can ONLY be done by a broker, is establishing the value of the business. 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 make one of the most important decisions in your lifetime: what is the business worth? 

Finally, your broker can help you create a listing agreement that will make sense for you and help you achieve the end results you are seeking. Personal attorneys and accountants – helpful to you in so many ways – don’t usually have the experience necessary to think through the many aspects of a listing agreement. So, while they are frequently trusted personal or business advisors to you, they generally lack the expertise required to help build your listing.

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.

There has probably never been a better time to consider selling. 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.