A business broker San Diego plays a very important role when it comes to the sale of a business. His work is not just to market your business but also to give you guidance throughout the sale. The broker will serve as a consultant and also help with business valuation as well as help quality buyers and help with the negotiations. During the sale, the business broker will also help you determine the right type of sale you should consider. He can recommend that you sell the assets, stocks or both. The option he recommends will mostly depend on the nature of your business and your preferences.
Basically, businesses are purchased as an asset or as a stock purchase. Most of the sales are, however, treated as asset sales. As a matter of fact, if your business is an LLC, partnership or sole proprietorship, the transaction is always going to be an asset sale. The sale changes when it comes to corporations. Although some sales of corporations can still be asset sales, the structure of the corporation may also mandate a stock sale. As aforementioned, business brokers San Diego will advise you on the right/best type of sale.
Buyers want to buy assets whereas sellers want to sell stock for better tax treatment. When you purchase assets versus stocks as a buyer, you will be leaving behind the potential of hidden liabilities. As a result of this, it is less risky for buyers to purchase business as assets than as stocks. In addition to that, a buyer has to allocate most of the sale to the tangible items which depreciate over time. You will have to write up and allocate the sale price to the intangibles like non-compete agreements, consulting agreements and goodwill.
This option is available to the corporations. The option is preferred by sellers so as to avoid the risk of double taxation. It also eliminates the risk of hidden liabilities on the part of the seller. Stock sales are also used to help a company generate funds.
The option you end up choosing will mostly depend on the nature of business as well as what you want to achieve at the end of the day. The best thing is that your business broker San Diego will guide you throughout the sale process. You only need to make sure that you hire a broker that has sold businesses that are similar to yours.
How do you know if a business broker Orange County is the best one for you or not? This is the top question that begs for answers when planning to sell a business through a business broker. Not every broker out there will be right for you. That is why you need to take the time to dig deeper into every agency that comes your way and only hire the broker that will guarantee results. In this post, we shall be discussing the top qualities you need to focus on when deciding on a broker to bring onboard.
Strict adherence to ethics
The last thing you want to do is to work with business brokers Orange County who are known for malpractices. Such a broker can help you close the deal fast but you will never be at peace. Working with a broker that doesn’t adhere to the ethics will expose you to lawsuits and you might even be prohibited from ever selling your company. Take the time to consider the experience and reputation of the broker you want to work with. Stay away from brokers with a history of malpractices.
Openness and honesty
Another important thing you will need to do is to consider how honest and open the business broker Orange County is. You don’t want to work with a broker that doesn’t listen. You want a broker that values your opinions and one that is willing to work with you throughout the sale. Nobody wants to be pushed around. If the communication skills of the broker are poor, you will end up being pushed around and forced to accept bad deals.
Ability to value a business correctly
In order to set the right selling price, you will need a business valuation. You can get the valuation report from a business appraiser or save money by working with a business broker who is adept in business valuation. If not valued correctly, the wrong selling price will be set and that will lead to problems. Buyers will request an independent valuation and if they find that your business has been overpriced, they will choose to look elsewhere. Most business brokers offer the valuation services free of charge.
Ability to develop and implement effective marketing strategies
Last but not least, the right business brokers Orange County should be able to develop and implement great marketing strategies. You need to ask your broker about the marketing strategy they plan on using and how they will deal with challenges. A good broker should also be able to explain why he chooses a certain strategy.