There are many things that have to be done once someone decides to put up a company for sale. It is a long process and a business broker can get it started, guide the seller through it, and help things run smoother. The business owner will have several things to do as well, such as continue to focus on daily operations to retain business value. A broker can take care of the business selling, starting with helping to determine the value of the business. The value is based on many factors, such as sales, earnings, market outlook, performance, the net value of the property, key personnel, and the fair market value of operating assets. Other factors may include image and reputation, although those are harder to gauge.
The broker will also deal with marketing, management of the process, screening buyers, coordination of negotiations, and ensuring confidentiality of the sale details. The seller usually pays the broker, so find one that has experience and ask a lot of questions. Most brokers work on commission, but there may be other fees to help prepare the business for listing. Be clear about costs from the very beginning.
Find out about qualifications and years of experience. The broker should be a Certified Business Intermediary (CBI), and being a member of the International Business Brokers Association (IBBA) is a definite plus. Many brokers are also licensed real estate agents, which is helpful. Ask about marketing strategies, the last business of comparable size sold, and how long it was listed before being sold.
The business owner can do several things to increase the value of the business, which will help it sell faster. Document operational processes, job descriptions, and strategic plans. Develop strong and independent staff to show that the business success does not rely on the owner. Organize financial statements, tax returns, sales and expense reports, and profit and loss statements, and have them readily available. Potential buyers will want to review those before buying the business. Do everything possible to boost name recognition, maintain solid working relationships with suppliers, and demonstrate excellent customer service. A buyer will not want a business that will not continue to do well once it is sold.