Business brokers San Diego bring buyers and sellers together. This is their chief function. However, this is not the only thing that the broker you bring on board will do for you. The process of closing a deal is far more complicated and the broker will help every step of the way. Once you bring a business broker on board, there are a couple of things he will do to complete the process successfully. Below is the typical brokerage process.
Set goals
The first thing a business broker San Diego will do for you is to attempt to set a target for the completion of the transaction. This is done through the letter of intent that the buyer and seller agree on. The best thing about this is that it gives the framework to structure negotiations. In the case of selling a business, the broker will first make sure that you are a serious seller. You will then be required to sign a contract that gives the broker the go ahead. The broker will then set an asking price based on business valuation and set a date on which the sale should be completed.
Close price gaps
With the goals in mind and the sellers consent, business brokers San Diego proceed to sealing the price gaps which may arise during the negotiations. Bearing in mind the commission the broker earns depends on how much he sells the business for, he will be very ruthless in closing the price gaps. He may advice the buyer to start by working on the flaws of his business in order to achieve a higher selling price. The broker will further draft a confidentiality agreement which keeps the sale a secret so as to avoid the risk of employees, customers, suppliers, lenders and other important parties from leaving the business during the ale. It is also the duty of the broker to come up with a structure that minimizes the tax burden.
Overcoming seller’s remorse
The seller’s remorse is a common occurrence in the latter stages of negotiations. There have been cases where sellers pulled out of the deal in the last minute after the reality of relinquishing control of their business hit them. If a seller pulls out, the broker will not earn anything is the seller withdraws from the sale. As a result, overcoming the seller’s remorse is something business brokers San Diego take seriously. Small acts such as allowing the owner to keep the company car can help solve this problem. Other times, deals can be made where the seller remains as a consultant and so on.
Due diligence
The fourth step is to get the paperwork in order ad handle meet all legal requirements. This is a very important step in the sale of a business. Business broker will take care of this part before the sale begins.
Closing
Last but not least, the business broker San Diego will help with the closing. He helps the parties involved to iron out as well as sign final contracts. During this time, the broker mostly serves as a mediator and peacemaker.