Learn The Businessbroker Secret And Greatly Improve Your Chances For A Successful Transaction.
The main businessbroker secret to success is to remember who works for who. That may be poor english but the concept is sound. You need to set the critical conditions for your intermediary to follow. Think carefully about the conditions that are important to you and make sure they are understood. Don't force yourself to learn this lesson the hard way as I did.
A secret of almost equal importance it to make your your intermediary has the right tools to work with. You need to provide essential information including a credible valuation, a comprehensive marketing presentation, necessary financial statements, and any information peculiar to your business and/or industry. Just as tradesmen need the tools of their trade, so your intermediary needs tools appropriate to his job.
This kind of intermediary can be extremely helpful in concluding a successful transaction. He can remove you from the daily detail of seeking and interacting with potential buyers. He will advertise the business in a way that protects its identity and yours. He will interact with those responding to the advertisements and provide preliminary information. He will take and respond to questions from respondents.
Properly coached and prepared your businessbroker will become the public face of your sales transaction. He will insulate you from the daily roller coaster of emotional stress that selling a business can bring, even when you have prepared it properly. And he will do all of this, while following your directions/guidelines provided that you manage him right.
Managing him right means that it is clear that he works for you, rather than being in the position of the tail wagging the dog. That can be a challenge in working with intermediaries. They tend to be quite independent. Otherwise they could not survive doing what they do. That's OK as long as they still take direction and stick to guidelines. You need to make sure that they don't start making up the guidelines. Remember that they usually get all or most of their pay when your transaction closes.
Until your transaction closes your broker may view everything he does as a cost. Either his time, or any actual out of pocket expenses he incurs. So his motivation is to get a transaction to close. After all, he is also working for himself, or he may be mostly working for himself, and you may be of secondary importance.
A credible valuation will go a long way towards heading off these arguments aimed at convincing you to accept a lower price than originally contemplated. Particularly if your businessbroker has high regard for the valuation provider.
There are various compensation schemes that can apply. Your intermediary may agree to work on pure contingent compensation or commission. Or he may wish to receive a significant retainer against contingent compensation. Or retainer plus. If there is an industry standard, I don't know it. So you have a whole range of options to consider.
Selecting the right person is also important. If at all possible get someone knowledgeable and experienced in your industry. You don't really want someone usually selling convenience stores to sell your car wash, or your dry cleaning facility, etc. Someone with greater industry experience can exude more authority when interacting with prospective buyers, and will understand your point of view better.
Request and check references. You not only want someone with a history of success in selling businesses like yours. You also want to be sure that they have a history of acting with integrity. This is extremely important, as someone with a questionable track record is unlikely to change for the better when dealing with you. Crooks remain crooks.
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