What Does a Business Broker do?

One of the most important services that a business broker gives is the ability to allow the business owner to keep focused on running their business during the selling process.

Business Appraisal: we learn about the business from financial performance to HR we then assess the business in the light of what a buyer and their advisors (accountant, lawyers, bankers, uncles-cousins-dog) could see as the strengths and weaknesses of the business and how that may affect the investment they would be willing to make.

Market Businesses: access the most appropriate marketing strategy for the business, maximizing exposure while maintaining the required levels of confidentiality. Create an Information Memorandum. Qualify potential buyers, while weeding out many others, through marketing and direct approaches.

Sharing Knowledge: representing the business and its information, enough to inspire a buyer to move forward but not so much as to potentially hurt a business if the information was used unscrupulously. -Managing the timing and depth if information shared through the process is an important skill.

Build relationships: when you sell a business, it is very different from selling your house, where handing over the keys is the only contact you may have with the other side. Owners are integral to a business and the one key thing that will definitely change when the business is sold. A buyer must feel security around this part of the transition, and the business’s goodwill can be tied closely to the relationship between the seller and purchaser. Recently we have even seen the purchasers bank leaning into this relationship, providing improved leading terms to sales where the Vendor is committed to longer, more robust handover terms.

Negotiate Deals: a broker has the skills to bring parties together in mutual agreement, there are many ways to bring a deal together and ways to structure a business purchase to suit both the buyer and seller. Keeping everyone at the table while the many differing approaches are refined to an option that works for everyone is the secret sauce that gets businesses sold.

Coordination across many parties: first and foremost, brokers are (or should be!) people people. There are so many parties involved in a business transaction, some with a huge amount on the line (buyer, seller), others with little to no incentive to go the extra mile (landlord, banker). In a single transaction a broker could be fielding questions and managing interactions between

• Seller, seller’s accountant, seller’s lawyer, seller’s business coach, landlord, landlord’s lawyer, property manager, franchisor/licensor, key supplier, key customers, key employees

• 100s of potential buyers, buyer’s accountant, buyer’s lawyer, buyer’s finance broker, buyer’s accountant, buyer’s banker.