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Why Use a Business Broker?

Why Use a Business Broker?

There are a number of key professionals when you are considering buying or selling a business. One of those is the business broker.

While there are many stories of bad experiences with business brokers, as is often associated with any commission based profession, like any profession; there are good and bad brokers.

However, both buyers and sellers can be well served by using a business broker – as long as you select the right one! Also, it is important that you understand the role of business brokers and their services.

Benefits of a Business Brokers for the Buyer

Business brokers offer a range of services to buyers. These are generally free of charge to the prospective buyer and should not be abused in the process.

The services include:

  • Access to listings and what’s on the market – often before they are listed.
  • Keep the deal moving and are focused on outcomes
  • They are the negotiator for both the buyer and the seller, however, they represent the seller
  • Progressing the deal through to settlement

A few tips for buyers:

  • Ensure you demonstrate that you are a qualified buyer who is ready to buy
  • Speak to the business broker regularly but only about businesses you are genuinely interested in
  • Do not abuse the free service or denigrate the ‘offer’
  • Remember they represent the vendor

Benefits of a Business Brokers for the Seller

Hopefully the benefits of a business broker for sellers are obvious. But often sellers do not recognise the extra value a good broker adds to a business for sale.

The services include:

  • Access to the market – often Australia wide
  • Allow the business owner (seller) to continue focussing on running the business – maintain value
  • Know how to market the business – experience. For many sellers, this is a once in a lifetime event.
  • Establish a fair selling price which will achieve your outcome
  • Separate the ‘tyre kickers’ from the genuine and qualified buyers
  • Keep the deal moving and are focused on outcomes
  • They are the negotiator for both the buyer and the seller, however, they represent the seller. For the seller, this means that the buyer is not negotiating directly with the decision maker.
  • Progressing the deal through to settlement

A few tips for sellers:

  • Ensure you give your broker the tools to sell the business – good information and a business prepared for sale
  • Speak to the business broker regularly and guide them as to your expectations
  • Listen to what the broker and the market is telling you.
  • Remember they represent you – the seller. Help them do their job.

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