Why Hire a Business Broker to Sell Your Small Business

November 2022

Small business owners are busy people who often wear many hats in a day. They oversee day-to-day operations and plan for the future. It may be time to sell when it all feels like too much. But owners will put off selling because it is a daunting task. Consider a consultation with your local business broker.

A business broker can help you navigate selling your small business. Everything from setting a price to finding a buyer and closing the deal. Here we give you seven great reasons to use a business broker's help to sell your San Diego small business successfully.

1) To Sell Your Business Quickly

When selling a small business and time is of the essence, a broker can show you how to make a quick sale. An experienced broker understands how to avoid common pitfalls and obstacles that delay or derail a sale. When your advisor understands your reasons to sell quickly, they will explain all options available to you that meet your immediate needs. 

2) To Get the Best Price

A business broker acts as an intermediary between you and the potential buyer. The intermediary sets a reasonable price and develops a portfolio of metrics to support the valuation and Key performance indicators during the negotiation phase. Having an intermediary is reassuring to the buyer, as a trusted third party with objective and fair interests in the sales process. 

3) To Avoid Legal Troubles

Business advisors help negotiate a sale's terms and facilitate legal documentation for both parties. A lawyer who draws up all legal documentation will prevent future issues that could develop from the sale. By understanding the legal matters hovering over the sale of your small business, the broker can help ensure that all parties are protected from any potential liability.

Also, these professionals are familiar with laws and regulations governing the sale of businesses. They can help ensure that the transaction is conducted correctly. They can also guide how to structure the deal to minimize the risk of legal issues down the road.

4) A Broker has Access to a Network of Buyers

One of the most significant advantages of hiring a broker is that they have access to a vast network of potential buyers looking for a business like yours. These professionals use their extensive networks and skills for marketing your business to the right buyers. They do the bulk of the work to achieve a successful sale. This means you can keep the business running top-notch and achieve the best price for your efforts.

5) To Complete Paperwork and Ensure Legal Transactions

The importance of error-free paperwork during the sale of a small business cannot be overstated. The paperwork is the foundation upon which the entire transaction is built, and any errors can have disastrous consequences. For example, if there are discrepancies between different documents, it quickly creates an argument to devalue the valuation during negotiations.

So you are wise to allow the experts to handle legal transactions. A full-service business broker has access to professionals for the required paperwork and legal transactions when needed. 

6) To Maintain Confidentiality

The sale of any business is a series of complex and sensitive transactions. Maintaining confidentiality is critical to the success of the sale. Confidentiality allows you to control the timing and release of information. It will ensure that potential buyers are qualified and serious about making an offer before releasing sensitive information.

There would be damaging potential for your San Diego business if the information were to leak out prematurely. If competition, customers, suppliers, and even employees hear rumors, it may destabilize operations. Leading to a damaged reputation and loss of customers and revenue. The valuation could be adversely affected.

7) A Keen Eye for Tire kickers

Tire kickers are individuals who "show" interest in a business for sale but are not serious about making a reasonable offer. They may request extensive information about your business (but never buy) and can ultimately derail a deal. They often make lowball offers that are not serious and interfere with the negotiation process. Having an experienced business broker on your side will screen buyers and keep tire kickers away.

8) To Achieve Peace of Mind

Selling a business is stressful and time-consuming. The paperwork and legalities are complex, which owners may find overwhelming. Remember, business brokers, advisors, and professionals who sell businesses have years of training and experience, so they understand the complexities of sales transactions. Your peace of mind can be affected by many factors. The most common concerns include the following:

●      Whether the business will sell at all. -- This can be particularly problematic if the business depends on your relationships with customers or suppliers (a common situation in small businesses).

●      The time it may take to prepare and sell -- A lengthy sales process can be wearing and complicate your future endeavors.

●      Anxiety about a reasonable price -- A good business broker can help you understand the valuation process. It is vital to have an open mind.

●      What will happen to your employees - A business broker will consult with you to determine the best situation for your employees and negotiate for them into the terms of a sales contract.

●      Completing due diligence -- A business broker will assist in the process and access the professionals you need to uncover risks and liabilities.

●      A common problem for a small business owner to face is the contradicting opinions of friends or relatives. When a business broker is involved you will not be stressed by others and their opinions. You will be confident in the decisions you make with your advisor.