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The Business
Broker and the Buyer
Business brokers
prefer to talk to people in person, and the buyer is
no exception. During a preliminary meeting in
the business brokerage office, the broker will
typically ask the prospective buyer question such as
these:
- Do you have the
necessary funds to buy a business?
- Is the cash
readily available?
- What is your
time-frame for buying a business?
- What are you
expectations about the purchase of a business?
- What are your best
skills, and what type of work do you like to do?
After this
fact-finding meeting, the broker can then show the
buyer businesses that are both feasible and that fit
the buyer's requirements. Further steps the
broker will lead the buyer through are as follows:
- Since sellers are
(rightly) concerned about confidentiality, the
broker will ask the prospective buyer to sign a
non-disclosure or confidentiality agreement.
- The broker will
provide the prospective buyer with preliminary
information about one or more businesses,
including pertinent financial data.
- The broker will
arrange for the buyer to see businesses of
interest.
- Once the buyer has
indicated strong interest in a particular
business, the broker can then supply additional
information and schedule further on-site
appointments.
- When the buyer is
ready, the business broker will be the best source
for answering questions, addressing concerns,
resolving loose ends, discussing deal structure,
and offering a business broker's unique expertise
in the business sale transaction.
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The
Business Broker and the Seller
When it comes time to
sell, one of the best decisions a business owner can
make is to continue managing his or her business
efficiently (and profitably), while depending on the
services of a business broker to orchestrate the steps
of the sale. To make the seller's job easier and
more effective, the business broker will...
...Determine the
right buyer for a particular business.
For locating and qualify prospective buyers, a
business broker uses computerized databases to
access compressive lists of local, national and
international buyers - all to increase the chances
of selling a business at peak value.
...Advice the
seller on pricing. The business broker is an
expert in placing a realistic price on the
business and incorporating intangibles: thus
reducing the danger that every sellers fears - under
pricing the business. Many times the business
broker will work with the seller to obtain an
independent business valuation report to determine
the proper value. At the same time, the
business broker can help the seller to understand
that the selling price was dictated by the
marketplace - not by a well-meaning accountant or
friend who may have an unrealistic idea of what the
business is worth.
...Prepare a
marketing strategy and offer advice about essential
marketing tools, such as a business description
memorandum: in fact, the broker will help the
seller in all key aspects of presenting the business
as effectively as possible. Later, the broker
also can help in the structuring of the sale
transaction.
...Present offers
and point out both strengths and weaknesses.
The business broker will be vital advisor during
most stages of the negotiation, bringing to
"the table" objective as well as
negotiation skills developed through the years of
experience in the buying and selling of businesses.
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