For many business owners, the thought of working with a business brokerage service seems intimidating and overwhelming. It’s not surprising – many misconceptions exist about the role and value of business brokers in the sales process.
The truth is that when it comes time to buy or sell a business, the help of an experienced professional is invaluable.
Business brokers have the knowledge and expertise to ensure the process goes smoothly and that you get the best deal possible. They are also well-versed in the legal requirements of buying or selling a business.
If you’re still not convinced that working with a business broker service is the right move, let us put some of your hesitations to rest. Here are five of the biggest myths about buying and selling businesses with the help of a broker service.
Myth #1: You Need a Big Brokerage Firm to Sell Your Business
Small businesses are the backbone of the economy, and their success largely depends on their owners. However, as a company grows larger, its owner tends to become less involved in day-to-day operations.
The same is true for brokerages. If you’re looking for a business brokerage service that is as involved and committed to your business as you are, it’s best to work with a smaller company, rather than a large, disconnected partner.
That’s one of the big reasons we’ve kept our firm relatively small. With Chris’s hands-on involvement and attention to detail, businesses can maximize their chances of success while minimizing their risks. We pride ourselves on personalized service – and that’s actually something most big brokerages can’t offer.
Myth #2: Business Brokers Only Work for Buyers
Contrary to popular belief, business brokers don’t just work for buyers. They provide a wide range of services to both buyers and sellers.
Business brokers offer valuable advice on how to navigate the world of business transactions, including support during the negotiation process. They also help with market analysis and due diligence, as well as assistance with legal paperwork and other aspects of the transaction.
As a seller, business broker services will help you find qualified buyers and facilitate negotiations. As a buyer, you’ll benefit from the broker’s expertise and ability to value your company for what it’s truly worth.
By utilizing their expertise, brokers provide guidance on pricing strategies, financial planning, and marketing tactics to ensure that the sale is successful for all involved. Their role is to serve as an intermediary, which means their one limitation is that they cannot serve a buyer and seller in the same transaction.
Myth #3: Owners Know What Their Businesses Are Worth
A company is really only valued at what price buyers are willing to pay for it. So, it’s tough to know what your company is worth until you’ve tested the market or had a professional valuation conducted.
A reputable business brokerage service will conduct an accurate business valuation by taking into account the company’s assets, liabilities, and future potential. This ensures the owner is selling for what the company is realistically worth – rather than asking too much or too little from potential buyers.
Chris Smith knows that the true value of a business comes down to its ability to earn a profit – and how much effort it takes from the new owner to generate that profit. When working with sellers, he uses trusted valuation methods to find an accurate and fair value for your business, so you can rest easy knowing you’re getting the top value when you sell.
Myth #4: Business Sales Are Similar to Real Estate Sales
It’s a common misconception that business sales are similar to real estate sales. While there are some similarities between the two, they do not share the same process.
Selling a company is a far more complicated process than selling real estate. This is one of the main reasons it’s so critical for business owners to seek assistance from an experienced brokerage firm.
Successfully brokering a business sale is a complex task that requires a great deal of knowledge and experience. Small businesses have much greater fluctuations in pricing than real estate and can come with a much higher degree of risk. This means there’s more trust put into most business brokers for small businesses than in the average real estate agent.
In 2021, on average, homes in the US were selling within 22 days of being listed. It may have been a record year, but it just goes to show that real estate can sell fast. On the other hand, only 30 to 40% of businesses that are listed for sale ever actually sell – making this a substantially more challenging field.
Whether you’re buying or selling, business brokers provide invaluable assistance. They’ll help you understand the process, develop a plan, and find the right buyer or seller. A broker will also offer advice on how best to advertise, negotiate with potential buyers/sellers, and close the deal.
Myth #5: Hiring a Business Broker Costs an Arm and a Leg
Brokers are an essential part of the business world, providing a valuable service that helps buyers and sellers find the right match for their needs. You might be worried that their expertise comes at a hefty cost – but that’s not necessarily true.
Most brokerage professionals offer accurate, fair prices for their level of work and professionalism. Even more importantly, they increase your chance of scoring a great deal for your purchase or sale – and that can easily make up for the broker’s commission costs.
Furthermore, working with a business broker like Chris Smith is a great way to ensure you are aware of all the fees associated with your transaction. This helps you budget correctly and avoid surprise fees, which could easily throw your transaction for a loop.
Want to Learn More? Reach Out to Chris.
Business brokers specialize in helping people buy and sell their businesses. They provide a wide range of services, such as business valuation, market analysis, financial advice, and negotiation support – and that’s just scratching the surface.
If you have any questions or are interested in buying a business or selling yours, we invite you to reach out. Chris and his team of experienced professionals are here to provide top-tier guidance when it comes to making important decisions for the future of your business.
We understand that this process can be daunting and overwhelming – let us help you every step of the way. Contact us now for a free consultation on the types of brokerage services or to find businesses for sale.