A competent business broker will be experienced in the market, will deploy multi-faceted marking initiatives to reach potential buyers, will help compile sales documents, manage confidentiality issues, assist in setting a realistic price, and will help handle and negotiate the technical aspects of the sale without being attached to your business.
It is a good idea to visit several reputable business brokers (See our Business Broker directory) to gain a complete picture of services available. Some business brokers specialise in particular areas and may even have a list of prospective buyers who are just waiting for the right business to become available.
1. To ensure your business is sale-ready and what needs to be done has been identified to boost the value of your business. They will look at any issues and provide advice on timing and preparing your business for sale.
2. Determine the market value of your business. They will review your business and it's financials, check out the market and similar business sales to determine the true market value of your business.
3. Create a marketing plan. Your broker will provide advice on how best to market your business and provide you with a campaign and spend schedule to flush out any potential buyers.
4. Manage enquiry and offers. Your broker will vet buyers, help prepare offers and oversea the due diligence process. They will also provide advice on how best to manage your staff, supplier and customer relations.
5. Help close the deal. Business brokers get paid on a successful sale. Your broker will help with the paper work, conditions of sale and anything needed to conclude the sale including staff stability and employee transitions.
Use a business broker that has a current and qualified database, who understands the market, and knows how to reach the potential buyers of your business. Don't be afraid to ask questions, for example how many prospective buyers are on their database, how much and where will they allocate on marketing your business, which newspapers and internet sites they will use. As with any professional, it is a good idea to ask the broker about recent sales and for the names of satisfied clients you can contact.
An experienced business broker can provide you with an appraisal on the value of your business using transaction data and valuation methodologies. Remember it is the job of the business broker to expose the business opportunity to the buyers who are likely to pay the highest and best price and to successfully manage the sale process.
Business brokers will often spread their marketing mix to include several mediums, for example newspaper advertising, specialist publications and internet websites like nzbizbuysell.co.nz which can expose your business to a huge database of buyers.
If confidentiality is an issue when selling your business, then any marketing can be tailored to exclude any specific identifying information of your business - by providing a general description only. Your broker will then screen potential buyers and guide the sale through to a satisfactory conclusion for all parties.
The broker's fee is usually paid when the business is sold. Generally fees vary depending on the sale price of the business, but as a rule of thumb the larger your business, the more room for negotiating a fee structure. If you intend to market the business yourself while also engaging the services of Business Broker, then discuss this with your Broker and include an agreed and appropriate clause covering any fees due should you find a buyer independently of your broker. Ensure the broker will only disclose information to qualified buyers who have signed a confidentiality agreement, and that it limits the right of use of such information.
If in doubt, seek independent or legal advice prior to engaging the services of a broker.
If you're looking for a business broker then check out our links to Business Brokers NZ Directory and see whose actively using the internet to market their client's businesses for sale. Here are some quick links to Auckland Business Brokers, Wellington Business Brokers and Christchurch Business Brokers.
The 12 questions to ask a Business Broker
Or check out our Business for Sale rates.
If you are looking to sell your business, consider the advantages of using a business broker. A professional business broker will ensure confidentiality, provide advice, help set your price, market your business, negotiate on your behalf, and bring your sale to a successful close.
A business broker is an agent or intermediary that assists in the sale and purchase of a small business. They help the business owner market, manage and secure the best price for their business. They will manage the process attending to the contractual requirements to ensure a successful sale and transfer.
This will vary depending on the size of the transaction, the location, business broker and brokerage company. In New Zealand this is typically around 6% - 8%, often with a minimum fee of $15,000 - $20,000. There can also be a marketing cost contribution - this can range from a few hundred dollars to thousands depending on the target market and type of business
By Richard O'Brien - nzbizbuysell
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