When you have made the decision to sell your business, one of the considerations you will need to address is whether to use the services of a business broker for the transaction. Do you really need a business broker, or can you just sell your business on your own?
The short answer is yes, you absolutely need a business broker.
What follows is the first in a series of articles listing the reasons why the services of a business broker are essential for a smooth and successful business transaction. Mistakes made during a business transaction, many made simply because of the inexperience of the business seller, can be extremely costly. The fees you pay to utilize an experienced broker can be more than justified by avoiding these major blunders.
What is the most important reason to use a business broker? A broker maintains confidentiality.
By using a broker you are ensuring the confidential marketing of your business to only those individuals who need to know the business is for sale. You, your broker, and potential buyers will need to know, but it is critical that list of those “in the know” stays short. It is also important that there are repercussions from a non-disclosure agreement if a deal with a potential buyer falls through. By using a broker, you are able to hide your business sale from competitors, vendors, and employees until the time is right to let everyone know the business is sold.
What can happen if confidentiality is breached? A bartender can take their loyal following of patrons to another establishment. A vendor can tell the competitor down the street that your business is for sale, and then you competitor can use that information to their advantage. Sub-contractors stop paying the contractor. Customers stop frequenting the business, or the entire staff quits.
Any of these circumstances has the potential to severely and adversely affect your business, especially if it occurs during the sale process, as a major loss of revenue can diminish the ultimate value a buyer places on your business.
Avoid these pitfalls by having a business broker maintain the confidentiality of your business throughout the transaction process.
Please feel free to leave a comment if you are a business seller who has had confidentiality issues in the past, or post questions here about how we maintain confidentiality while implementing our proven business marketing method.
Want to read Part 2: Evaluation? Click here.
Want to read Part 3: Keeping Your Business Running? Click here.
Want to read Part 4: Marketing Power? Click here.
Want to read Part 5: Protection from Legal Issues? Click here.