In the business world, there are many titles, and one that you may often hear about is a business broker. For those curious souls who want to be aware of every aspect of business, you might wonder what it is that a business broker actually does and how they could benefit you. Let’s find out!
What is a business broker?
By definition, a business broker is a professional dedicated to assisting people buy and sell businesses. Essentially, they are the people who play the role of matchmakers between business owners and prospective buyers to help make navigating business sales a breeze.
What skills does a good business broker need?
Selling or buying a business is a huge undertaking consisting of multiple tasks, and this requires business brokers to have specific skills to successfully navigate business sales. The key skills business brokers need to acquire are:
- Negotiation skills - A business sale relies heavily on business brokers being able to mediate between the buyer and seller, which means there will always be a number of negotiations that will take place before all parties are satisfied with the terms of the sale
- Interpersonal skills - To be able to market and negotiate, business brokers must have impressive interpersonal skills. This allows them to empathise with sellers and buyers, build strong relationships and ultimately ensure all parties trust them with the sale
- Financial Acumen - Determining the value of a business accurately requires business brokers to have impeccable financial acumen
- Technological proficiency - Business brokers need to be able to be able to communicate well, market effectively and analyse important data to successfully sell a business and this uses multiple technological platforms
What are the key responsibilities of a business broker?
Seeing as though business brokers are the intermediaries between business sellers and buyers, you’ll understand that there are a lot of responsibilities that come with the role — they do not just find a seller and buyer and are done, but there is so much more to the job. Here are some of the key responsibilities that fall onto business brokers:
- Business valuation - Business brokers perform a business valuation to determine the correct price of the business so that it is right for all parties involved. A business valuation is an objective analysis that helps set realistic expectations and avoid a business being over or underpriced
- Marketing - Business brokers provide marketing services to attract prospective buyers using various strategies and platforms to reach a wide audience and portray the business in the best light
- Negotiating - Business brokers assist with negotiations to ensure that both the buyers and the seller come to fair terms regarding the sale of the business
- Facilitating transfer of ownership - Business brokers are expected to facilitate the transfer of ownership of the business between the seller and the buyer
- Managing due diligence - Business brokers are also responsible for managing the due diligence processes for business sales. They need to ensure that all the necessary financial and legal documents are in order
- Assist post-sale - Business brokers can provide post-sale support by assisting with transition services for both parties as they adapt to their new roles for a seamless exchange
- Maintain confidentiality - Business brokers ensure confidentiality throughout the sale of the business to keep the transition as discreet as possible. They will do this by getting interested buyers to sign non-disclosure agreements. This helps ensure that employers can retain key staff so the business can continue running smoothly and competitors don’t get an upper hand
Is it worth working with a business broker as a seller?
Good business brokers with the right skills and experience can prove invaluable in selling a business. There are so many benefits that come with hiring a business; in most circumstances, it is worth hiring a business broker. However, it’s up to you to find the right one who has experience with your particular industry. Here are some of the best benefits of working with a business broker:
- They can provide you with an extensive network of screened potential buyers and will handle the marketing of the business, so you don’t have to
- They possess an in-depth knowledge of the industry and know how to navigate the intricacies of multiple market sectors
- They can provide you with expert support and guidance throughout every stage of the sale, including post-sale
- They are strong negotiators who will be able to get you the best price and terms of sale
- They maintain confidentiality to minimise anxiety in the business and ensure that sensitive information remains confidential
- They help streamline the process of selling the business so that business owners don’t feel overwhelmed and that all the legal and financial documents are in order
Final Thoughts
Hiring the right business broker is one way business owners can not only have an easier time selling their business, but they will also be able to help you improve the value of your business when it comes to the sale. Do you have to hire a business broker when buying or selling a business? No, but with their skills, knowledge, and contacts, they can prove to be invaluable to the sale of your business if you find the right one.