A business broker San Diego is also referred to as the business transfer agent. The work of a broker is to assist the seller and buyer of privately owned businesses in the selling and buying process. The broker will estimate the value of the business, advertise it without disclosing its identity, handle all the interviews with potential buyers and assist with negotiations. Simply put, the broker facilitates the process of selling a business. But why should you hire a broker?
Assist with valuation
Prior to putting your business on the market, you have to set the right selling price. The wrong price will not only push buyers away but also cause you to sell at a loss. Your business broker San Diego will help with business valuation. This is done to determine the actual value of your business. The broker will then use this information and with the prevailing market trends come up with the best selling price.
Develop comprehensive Information Memorandum
Another thing that a broker will do for you is to come up with the Information Memorandum. This is usually a 5 to 10 pages document that outlines your business’ potential for the buyers. This is usually the pitch. It has to be as enticing to the buyers as possible. Having sold many businesses before yours, the broker will be able to come up with the most comprehensive Information Memorandum for your business.
Conduct buyer research
Not every buyer that comes knocking is interested in buying your business. Some of them don’t even have the means to finance the project. One of the duties of business brokers San Diego is to conduct buyer research. The broker pre-screens buyers to ensure they are financially qualified to purchase your business. This is done before they are given any information about your company.
Prepare necessary papers
A lot of paperwork is involved in the sale of a business. It is the work of a broker to get this paperwork ready. The broker will help you with all necessary papers starting from the papers that describe your business to financial and tax documents. He will also help with the documents at closing.
The sale of a business you have setup from the ground up can arouse emotions. This is why you need to leave the negotiating part to the broker. The business broker is emotionally detached and will be able to handle the negotiations without any biasness.
There is a lot more that a business broker San Diego will do for you. Other crucial things the broker will do include maintaining confidentiality and let you leverage on his market knowledge. The only thing you have to do is to hire the broker who is experienced and with a good reputation.
Business brokers Orange County are charged with the responsibility of connecting potential buyers with business sellers. They serve as intermediaries. However, not every broker you hire will deliver the results you need. This is why you need to learn of the signs of a bad broker before you get started. In this post, we shall be examining the main signs that tell you that you are dealing with a bad business broker.
Difficulty getting references quickly
Prior to hiring a business broker Orange County, you want to hear what recent clients have to say about the services the broker rendered. When you ask for references and your broker takes long to give you the contacts, there is a good chance you are about to get in business with the wrong person. A good broker will have numerous references at his/her fingertips. Don’t just limit yourself to the references given to you by the broker. Search for Google reviews or look the broker up on LinkedIn.
You are asked to pay upfront fees
Just because you are being asked to pay an upfront fee doesn’t mean the broker is a bad firm. However, if you are being asked to pay money upfront, you need to dig deeper to know why the fee is being required. The upfront fee may be required to cater for things like advertising and business valuation. All in all, you shouldn’t pay a lot of money as the upfront fee. The broker gets paid on commission. He should be able to explain to you clearly why an upfront fee is needed. The last thing you want is to pay the upfront fee and the broker to shelf your business for months.
You don’t understand the marketing plan
Marketing a business for sale effectively is not an easy task. There is a lot that goes into this process. Even so, you need to know how the broker will be marketing your business. If he is not willing to explain to you clearly how his strategy works, there is a good chance he will not give you the support that you need. A good business broker Orange County will have a defined and thoughtful marketing plan.
He lets the buyer dictate the process
When buying a business, there are hundreds of steps and details that are required to close the transaction. A bad business broker will leave the process to the buyer. Allowing the buyer to take charge will leave you, the seller, at a disadvantage. You need a broker that is the authority in the process. He should be willing to give you information on how he manages buyers and the entire buying process.
Other signs include getting a business valuation that is not detailed and a broker that is not as interested in your business. Remember that no business is perfect. As a matter of fact, you should be wary of business brokers Orange County who don’t have any negative reviews.