The number of businesses that were bought and sold in the US in the years 2017 and 2018 hit record numbers. The Annual Insight Report from BizBuySell.com has indicated that nearly 9,919 close transactions were reported in 2017 and 10,312 were reported in 2018. While the latter (3.9%) isn’t as large an increase as the former (27%), it’s still an indication that more and more businesses are being bought and sold in the US than ever before.
In this instance, it’s important to remember that in the cutthroat world of competition, there is always a chance that those who buy your business will tremendously undervalue it. This could be because they tend to make a huge buck off of it, or that they’re generally dishonest and tend to do this with all their deals. However, sometimes it may be that you’re the culprit. You may be undervaluing your business because you don’t know exactly how much it’s worth. Remember the parable of Roy Raymond, the founder of Victoria’s Secret who sold the business for $4 million only to see it worth $500 million before jumping off the Golden Gate Bridge and committing suicide.
If you have a business broker, then it would be much less likely for you to make a bad call on valuing your company. Here is a full rundown of some of the benefits that you can take advantage of if you simply have the assistance of a great business broker.
You can check out this helpful article for more help on the subject.
Helping Business Valuations
You shouldn’t ever sell a business without an evaluation and checking whether the market price is reflecting the actual value of the business. The market price can be wrong for a number of reasons; however, from a seller’s perspective, it should always be above that of its actual value.
Selling a business with a price that is lower than its fair value is a very bad idea. A business broker would know how to value the business in a way which accurately reflects its present as well as its future value, and earning potential.
You can Tap into Decades of Experience within the Business Community
Business brokers have a lot of experience—decade’s worth in fact—of buying and selling businesses. They’ve seen it all and know how to pin down potential business through matching skills and preferences of an individual. They can evaluate what the earning potential of the business is and negotiate for the best deal with the buyer.
What business brokers do may seem like very easy at first; however, when you roll up your own sleeves to try to do it yourself, you may find it more cumbersome and tricky than you originally thought. Since there are a lot of types of businesses out there, there isn’t one solution to selling them all. There needs to be an iron clad understanding of the system as well.
If not, then selling your business for much less than its earning potential and potential future valuation is very much a possibility.
They Maintain Confidentiality
Brokers usually sign confidentiality agreements so that your discussions with them as well as all the confidential information you share with them in the form of emails or any other written form will be kept secret. Business brokers are experienced in prospecting businesses without divulging any information. When you’re selling a business, you could reveal confidential information about it without knowing that you are—the business broker makes sure that doesn’t happen.
The divulging of such information can result in criminal elements taking advantage of it and extorting money out of you or damaging your business in some way for a profit. The information can also be used to commit fraud or even identity theft, both of which can be at huge personal and professional cost to you and could irreparably damage your business and make it worth much less than it is right now.
It’s incredibly important for you, thus, to work with a business broker so that all your best secrets and confidential knowledge is kept under wraps and within confidence.
They Take Care of the Nitty Gritty and Details That You May Miss
Business brokers handle all of the little details that you have to be concerned with when selling or buying a business. They prepare the documents necessary for the transaction to take place, of course, but the documents that will be required don’t just concern the transaction itself, but they also concern non-disclosure agreements, non–competes, or any other points that were agreed upon during the negotiations.
Business brokers take care of the arduous task of prospecting businesses which are attractive and will conduct a very thorough research of the businesses that you are trying to sell or buy in order to figure out their weak and strong points. This research will entail all the required licenses, the regulatory documents for operating businesses in particular locations and will remove certain headaches which are involved in the evaluation and the closing of a business deal.
They Can Negotiate A Great Deal On Your Behalf
Finally, business brokers can negotiate a deal for the best price. They can utilize information which is gained about businesses when they perform a valuation and are negotiating with the buyer. There is a much greater likelihood of closing a deal in shorter time and at the right price when you hire a business broker.
Contacting a professional business broker really is the best thing for you to do when trying to sell your business. Once you do find a good one, you should share everything with him/her in order that your business can be evaluated accurately. This will help you to get a great price and also to know how valuable your business can be in the future. That may not be something that you think will affect the price, but it will. The future value of businesses is what business brokers specialize in and always keep in mind in order to boost the price of a prospective business.