Who is a Business Broker?

A business broker is a person or firm who/which acts as an intermediary between sellers and buyers of small or medium businesses. A business broker services similar to a real estate broker by offering the match making service of bringing together buyers and sellers of businesses. The right business broker can help your small business to achieve the maximum dollar value.

Services offered by Business Broker

Broker services vary widely depending on the practice and skill set of the broker.

The most common services offered by a business broker are:

• Assist client in establishing an estimate the value of the business or MPSP Value - Most Probable Selling Price Valuation the techniques used by individual brokers can vary greatly in this process.
• Develop a comprehensive Information Memorandum of the business document outlining the business for potential buyers.
• Advertise it for sale with or without disclosing its identity.
• Marketing the business to prospective buyers, screen buyers for ability to complete a purchase, handle the initial potential buyer interviews, discussions, and negotiations with prospective buyers.
• Facilitate the progress of the due diligence investigation and generally assist with the business sale.
• Coordinate negotiations and provide deal structuring advice
• Provide overall deal management to guide the client through the entire process; help maintain confidentiality of the sale, Business Consulting based on the client's needs.

Perhaps one of the most important services provided by brokers is the ability to allow owners to stay focused on running their business during the sale process as it takes 6 to 12 months to complete sale process.

Finding a Right Business Broker

One best practice is to always get a referral from a trusted business sources like accountant, lawyer, peers, and industry association for the names right business brokers.

As a business seller it is important to examine the broker’s background, experience, and credentials. Preferably business broker should have a clean background without any complaints or law suits against them. It is better to check their references.

Specialized business broker who spend full time on their professions and domain based who have handled sales of your type of business before will add more value to your sales transaction than other type of business brokers. A full-time business broker can not only bring in a network of contacts but has an understanding of the principles of business valuation. Find someone who is dedicated to the profession.

A good business broker should have a good marketing plan including details of advertising strategies to attract a wide range of potential buyer leads, as selling a business is all about marketing. Properly positioning the sale of your business to attract and motivate as many buyers as possible should be his/her goal.

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