There is no requirement to hire a broker to facilitate the sale of your business. Just like you can cut your own hair, mow your own lawn, stich your own cuts and clean your own teeth, there is no “need” to hire a professional. The question is not “need,” but “why”?
Typically business owners sell their business once in their lifetime. A broker facilitates hundreds of transactions.
Imagine venturing out into the woods on an extensive mountain tour or fishing trip. You have never gone mountaineering before or are exploring new waters for fishing. If you hire a guide, they will make sure you are on the right trail and direct you to the best fishing spot. They’ve completed this trail dozen of times. You could almost call them your secret sauce to a successful trip.
As you journey together you will lean on your guide to know what to pack, what to leave behind, how to avoid stumbling blocks. On the trail they will point out common mistakes and any shortcuts they have found successful. Together, you can achieve something you’ve never done before. The result? You will arrive at your new destination.
When we look at that example, or the previous service providers we turn to, it would almost be silly not to hire a professional. What do you know about mountaineering or fishing in a new place? Yet the majority of business owners do not enlist a broker to facilitate their business sale. To add to that, less than 20% of all businesses actually sell.
I believe we are seeing a direct cause and effect.
So if you have a business exit on the horizon, and want to sell, how do you become part of the 20% of businesses that actually sell?
You need a guide.
Not just any guide. You need an experienced provider who knows the specific trail you are looking to conquer. The key to finding a good broker is like finding any other good service provider. Out in the world there are good tax advisors, legal advisors, dentists and doctors, just like there are bad ones.
You need to understand what they are providing for their service and exactly what makes them successful. Regardless of the industry, service based businesses have one major similarity. The majority of providers gain new clients through referrals. Naturally, the good ones always seem to climb to the top. Identify the top providers in related industries or reach out to providers you trust. They will be able to point you in the right direction. Odds are they are working together. Quality tends to attract quality.
Let’s dive into the attributes of a good business broker. Their services extend beyond solely finding you a buyer. They also help prepare your business to sell prior to going to market. Trust me, that process requires much more work than anticipated. You need to put your best foot forward when you enter the market.
Spend the time making sure you’re hiring a qualified broker who understands business, finance, banking, transactions, HR and the sales process. All those skills will be necessary to position your business to attract the right qualified buyer.
In order to sell it, they need to be able to understand your business model, the unique value proposition and what makes it valuable in the market. They need to be able to relate your financials to a bank or financial buyer.
And lastly, they need to be able to coach you on the process. No selling process goes through smoothly. There will be bumps. They need to prepare you for the process, letting you know when the bumps are on the horizon or when you’re getting a curve ball.
Just like the mountain guide, you will need to be able to lean on them for guidance and wisdom. When the trail gets difficult, you need reassurance and someone to listen to you. As you encounter stumbling blocks, they need to be problem solvers and multitaskers.
View a business broker as a partner. They are someone you can trust with the experience to successfully navigate selling your business.
Do you “need” a broker? No. But it increases your chances of successfully selling your business, making your life easier in the process.
Again the real question is not, “Do you need a business broker?” but rather, “Why wouldn’t you want an experienced guide helping you achieve success as you sell your largest asset?”
If you would like to know more about how a business broker can set you up for success as you sell your business, contact me today. Together we can help you navigate the complex process of exiting you business and help you transition to the next phase of your life.