Business brokers San Diego have the responsibility of helping business owners find the best buyers for their company and sell profitably. Brokers are paid at the end of the deal and on a commission. The commission is a percentage of the total selling price. What this means is that the broker has your best interest at heart. The sooner he sells and the more profitable the sale is the sooner he gets paid and the more money he gets.
During the sale of a business, you will have to work with various professionals. In addition to hiring a business broker San Diego, you will also need help from an accountant and an attorney. Of all the people you hire, none of them are as important as the business broker and here is why.
Prior to setting the asking price of your business, you will need a business valuation. In the past, you had to hire a valuation expert to help with the valuation. Today, most business brokers offer free valuation reports. This means you get to save time that would otherwise have gone to a valuation expert. What is more is that a valuation report by a broker is more reliable because it is not just based on text-book calculations.
Your employees, suppliers, customers and lenders must not know that you are selling your business. This is because there is a high chance of their leaving you if they realize you are selling. If you lose any of them, the value of your business will go down. When selling on your own, managing confidentiality can be hard. Everyone will immediately associate you with your company. On the other hand, a business broker San Diego is not in any way linked to your business. He will also draft a foolproof confidentiality agreement that has to be signed before potential buyers are given any information regarding your business. It is easier to manage confidentiality when working with a business broker than when selling on your own.
Qualify potential buyers
Not everyone that comes knocking is really interested in buying your business. Some people just want an insider scoop into your business. A business broker will help qualify buyers before letting them in. He will ensure their objectives are in line with yours and that they can secure the finances needed to purchase your business.
Help you sell fast
Last but not least, business brokers San Diego will help you sell fast. They have better connections that they will use in marketing your business and they are more experienced in negotiations. Remember that the sooner a company is sold the sooner a broker is paid. Closing the deal fast is a top priority for business brokers.
These are the four important ways that a business broker will help with the sale. All you have to do is to find the most experienced and reputable broker in the business.
A business broker Orange County has your best interest at heart. This is for the simple reason that his interests and yours are intertwined. The sooner he sells your business the sooner he gets paid. The more money he helps you make in the sale the more money he earns. Even so, it is good to note that not all brokers out there have your best interest at heart. Prior to hiring any service provider, you need to ask them the following questions.
Have you sold businesses like mine?
The purpose of this question is to make sure that the broker has the experience you need to sell fast and profitably. If his focus has only been on multimillion dollar businesses and yours is only worth a few hundred thousand, the broker will not give you the service you need. The business brokers Orange County that you consider must have sold businesses that are of the same size as yours and must also have experience working with businesses in your industry.
What is your commission?
Business brokers are paid a commission. This is a percentage of the total selling price. This question will help you determine how much you will end up paying at the end of the deal. The lower the commission is the better. The business broker commission can be as low as 5% or as high as 15% or even more. The good news is that you can always negotiate with the broker to get a better commission. Even so, you should note that most reputable brokers will be unwilling to bring their commission down.
Are there any extra costs?
With some business brokers Orange County, you will be required to pay an upfront fee. This is meant to cover for the initial expenses such as marketing and getting the business ready for sale. Ask the broker about the other costs. All in all, you must steer clear of any business broker that asks for huge upfront fee.
Can you provide me with references?
Last but not least, you need to ask the broker for references. The only way of telling if a business broker Orange County is reliable is by talking to his recent clients. You will not be able to do this if the broker is unwilling to provide you with references. Ask for at least five references and contact them. If the responses you get are negative, you should consider using a different brokerage firm.
These are essential questions that you must ask before bringing a business broker onboard. Even so, the broker you end up hiring must be the one you feel the most comfortable working with. Don’t hire someone just for the sake of hiring.