What Can A Business Broker Do For You?
Estimated reading time: 4 minutes
Whether you’re buying or selling a business, it helps to have an adviser by your side who can guide you through the process.
Business brokers research on your behalf, ensuring that you not only find a buyer/seller, but also that they meet your requirements. They work with business brokerage firms that facilitate transactions between buyers and sellers of businesses.
We connect buyers and sellers and serve as mediators to ensure that both parties’ interests are protected during the transaction.
There’s a misconception that to be a successful entrepreneur, you must come up with a business plan that fulfills a need in the market that currently isn’t being met. But this isn’t true. You can be quite successful by purchasing an existing business that has already achieved certain milestones.
According to reports published by the Small Business Association, only 50% of small businesses survive more than 5 years. This happens mainly because they struggle to gain traction, or if they don’t have a scalable market.
Deloitte’s M&A Trends 2019 stated that buying a business is most beneficial when a company is looking to diversify its services and acquire a new customer base.
For example, when Airbnb decided to expand its services and began offering bookings for business spaces, it acquired a Denmark-based business booking service website instead of modifying its business model. It made more financial sense for Airbnb to acquire a business that already had a secure customer base and a profitable business model, than to start from scratch.
So why work with a business broker?
In the initial meeting, a business broker will take the time to understand your areas of interests, your budget, and your objectives.
Find the Right Market
Understanding market conditions is crucial for buyers. Brokers analyze the customer base of potential businesses you can purchase. Businesses with a growing market are scalable, so buyers have plenty of opportunities to increase their revenue streams.
Grip on Financial Ratios
Business brokers have a solid grip on the financial ratios that are used to assess the profitability of a business. They also acquire knowledge about the business, which allows them to interpret them correctly and advise you accordingly.
Access to Databases
Business brokers usually have access to extensive databases of businesses that are available for sale. They’ll match the business’s specifications with your requirements and provide you with details if they feel like it’s an opportunity worth exploring.
Experienced brokers educate buyers about the process, making sure their goals align with clients’. Once the buyer and the broker have a clear idea of what they want, the broker can begin their search.
When working with a seller, a business broker’s job is to sell the business at its maximum value.
Skilled business brokers meet with sellers and ensure that the business is profitable during the time of sale. They’ll discuss the reasons for selling the business and the desired value that its owners are looking for.
Based on the owner’s goals and objectives, experienced business brokers will devise a strategic marketing plan to enhance visibility among potential buyers. In a competitive business environment, brokers will have to use a multichannel approach to maximize exposure.
Position Your Business on Social Media Channels
Social media channels have to be incorporated into the marketing mix in the digital era. Established business brokers have wide reach on social media platforms and will position your business accordingly.
One of the hardest parts of selling a business is getting valuation right. Sellers tend to set high valuations, which in turn put off potential buyers. Brokerage firms not only help you arrive at the correct valuation for your business, but they also implement strategies to hike up its value.
Increasing valuation involves several strategies, including diversifying revenues, addressing an unmet market need, penetrating a new market, and drawing out a long-term plan based on extensive market research.
Other than valuation, business brokers are also responsible for screening sellers. There will be many people who’ll show interest in buying your business, but how many are serious? How many have the finances to purchase your business?
Sellers shouldn’t rush the selling process; it’s important to take the time to find a buyer who they can trust and negotiate a deal that benefits both parties.
Business brokers offer an unbiased perspective, and make sure that the deal benefits all involved parties. If you’re thinking of buying or selling a business, find a business broker that has a proven record of success.
Business brokers that work with reputable firms can connect you with accountants and attorneys, giving you the peace of mind of knowing that you’re making a good financial decision.
TBX Florida boasts a record of successful transactions. We take the time to understand the needs of our clients and advise them accordingly. We’ve had the pleasure of working with businesses across all kinds of industries, including automotive and personal care businesses that were worth over $1 million.
Feel free to get in touch with us to find out more about our services.