Commonly Asked Questions Regarding Business Brokers

Commonly Asked Questions Regarding Business Brokers

Businesses for sale in south florida

Have you been looking for the right business for many months? You have decided that you want to purchase your own business, but do not know where to start. Many of the businesses you have come into contact with so far are either too expensive, not currently producing enough income, or are not for sale. If this sounds like your current situation, it might be time to work with a business broker.

What exactly is a business broker?

A business broker is someone who brings businesses and buyers together. If you are looking for a specific type of business, a business broker is the perfect resource to work with. They also help with business acquisition strategy, by smoothing out all of the details involved in the buying and selling process. Also looking for information about selling your business? Your business broker can handle that also.

When to call a business broker?

You already know that you should call a business broker when you are struggling to find the right business for sale. However, you should also call your business broker when you are finding it difficult to come to a value agreement. Owners set their own price when putting their business for sale, and you may not always agree with the price. This is when a business valuation can be valuable. A business valuation is an attempt to estimate the company?s present value and the likelihood of future cash flows. There are three primary business valuation methods, asset based approach, earning value approach, and market value approach. Your business broker can advise you on the best approach to take, depending on the type of business.

What other services can a business broker provide?

Your hard work is not completed once you have purchased your new business. You will also have to complete all of the acquisition services that are common when acquiring a new business. Much of the business acquisition strategy should be planned prior to closing on the business, but it is likely that new issues will arise. The business broker can help to smooth out these details. For example, according to the Q1 2017 IBBA Market Pulse survey, 50% of people who bought small businesses (less than $500K) were first time buyers, while only 34% were serial entrepreneurs. If you are a first time buyer, it is very likely that new concerns will arise upon ownership and the business broker can be a valuable resource during this time.

What about unique buying situations?

Unique buying situations can make the business acquisition strategy even more confusing. An example of a unique buying situation is when the business seller sets specific requirements for a sale. Owners care about more than just money when it comes to selling a business. The 2017 IBBA Market Pulse survey indicates that cash as close is the number one most desirable factor for sellers, however, taking care of employees comes in at a close second. Your business broker can help you with the business acquisition strategy, both for traditional and unique buying situations.

When should you sell?

If you are purchasing your new small business to operate, you are probably not worrying about selling anytime soon. However, if you are purchasing it with the intent of turning it around and selling it within the next 5 years, a business broker can also be very helpful. Business brokers are experts in business sales and purchases. They can assist you in the business selling preparations, including when to sell, the price to set the business at, and the specific details of the business sale.

Every year, many business owners make the decision to either purchase or sell a small business. There is a lot involved with this buying and selling process. A business broker can act as the mediator between the two parties. They can also provide those that want to purchase with available businesses on the market. Your business broker is an invaluable part of the buying and selling process.


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