Are you in the process of selling your established business and not sure on whether to hire a broker? There are many reasons to hire a licensed and experienced business broker. As experienced real estate and corporate attorneys, we have listed five great reasons to hire a business broker.
No Upfront Payment
Brokers work for free! Essentially. Brokers work on commission at the closing of a business sale, which means they only get paid once the seller decides on a buyer, signs the contracts, and closes the sale of your business. Why is it important? Most service providers bill upfront; a flat fee or by the hour. But a business broker will do doing all the work for free until the seller is satisfied with the sale and is ensured to receive money.
Brokers Take Your Stress for You
Business brokers will ensure all sale road-blocks are taken care of stress free, saving the seller emotional and psychological stress. Essentially, the seller will have a person who will do all the work in the business transaction. He/she will find a buyer, negotiate all terms to the seller’s satisfaction, assess market price for the business, and ensure that the seller is not exposed to liability. In other words, brokers are seller’s personal assistants in the deal.
They Know Markets Better Than You Do
Brokers have the necessary tools and expertise to value the business. Our firm has handled the legal work for multiple closings of businesses, and it is evident that when a broker is involved a client gets the highest value for their business. A business owner may think the value of his/her business is X but often, a broker comes in and assesses the value at 3X or even 5X.
Broker Resources Increase Your Business Exposure
Brokers have access to resources that business owners do not. They are members to various associations or organizations, they subscribe to different portals and websites for business listings, and often they just know potential parties. For a seller that means increased exposure. A seller may individually try to sell his/her business on free websites (for example Craigslist) that may not get the seller the high end, qualified buyer he/she wants. A broker increases exposure of the seller’s business by advertising it on broker’s resources, allowing the seller to get quality buyers.
One Stop Shop
Brokers maintain relationships with everyone they may need in a business sale. They will have a trusted real estate attorney for any real estate work, a trusted business attorney for all closing work, an escrow agent to secure the funds in trust, a banker to get financing if needed, and often an attorney mediator to negotiate between parties. Most of these people also get paid at closing, which means that the seller will not incur any costs for any of these services.
Our firm has represented brokers, sellers and buyers in multiple business purchases and sales in this growing Texas market. Call us for your real estate and corporate issues.