As opposed to selling your own home, I believe that selling a business is a job for a specialist and here’s why. In a home sale there are fewer variables and prospects can readily get a feel for exactly what they are buying. They walk through it , see if they like the home and the area, do a white ant and building inspection, get finance and go to contract. That’s it.
When buying a business however there is so much more to be considered and there is a definite skill in conveying these things to a potential buyer.
A colleague of mine who is a Port Macquarie Business Broker set me straight on some key facts about business brokerage and the differences between his industry and my own ( in which I assist diy sellers) In the case of selling a business as a going concern, it’s not merely selling a premises, as it is with a house sale. Its knowing what sort of future prospects are in store for the business itself and the industry that it’s involved in.
It’s also having an understanding of the businesses value,which in some cases may not be reflected in the cashflow or balance sheets for that business. After all, it’s a naive person who imagines that all businesses always declare all income.
The sort of information a good broker might garner about a business upon which he is acting is also likely to be somewhat private and perhaps commercially sensitive information. As such it needs to be treated carefully.
Only a good business broker knows how to give out sufficient information without ” throwing out the baby with the bath water”
After all you don’t want your competitors knowing things like how much your monthly cashflow is, how many sales you make and of what item.
You don’t want your competition to know how well, or how badly, your business is performing either. In fact you would probably prefer that your rivals didn’t even know your business was for sale at all. So it does take a certain skill to be able to provide ample information to turn a prospect into a buyer without giving away more than is absolutely necessary.
From a buyer’s perspective a professional business broker will narrow the search down to only businesses that fit their criteria and thus help them avoid much wasted time, effort, and in the end… money.
That’s not to say that the role of the broker is to educate his prospects about the industry in general and of course brokers would always rather work with buyers who already know what they want and need.
Buyers can use that knowledge to their advantage by giving the broker the clearest possible description of their requirements so that the broker can source things with confidence.
Brokers have networks of contacts around the country and a business owner generally does not. They also have that most valuable of resources, a list of hungry buyers. The broker will have already vetted their ability to buy a business, to some degree, as it’s in their interests to know this. Put simply the broker will not want to be wasting time on tire kickers. He or she is a business professional and their time is money. This means that both business buyer and business seller can expect a broker to be very effective in the role.
I’m a real estate agent and generally believe in people’s ability to sell their own house, but when it comes to selling a business, I think it’s a job for a specialist business broker.
After speaking with my friend and colleague who is a Port Macquarie Business Broker, I’m now even more convinced, that only a broker can do your business justice in terms of making an effective, profitable, private… and a speedy sale!
Author: Andrew Blachut
Australian Real Estate