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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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