“It takes less time to do a thing right than it does to explain why you did it wrong.” – Henry Longfellow
When contemplating the sale of their business, many business owners will make the short sighted decision to try and avoid paying a broker’s commission by selling the business on their own. In the great majority of instances, DIY sellers will not be successful in selling their business as those who did hire a business broker.
Selling Your Business Without A Broker
Sellers who want to sell their own business without a business broker will also face a host of self-inflicted woes because they do not have professional representation. The biggest problems from not having a business broker stem from the lack of confidentiality in the sales process and from not having the business advertised properly.
Professional business brokers ensure that your business is advertised properly and extensively. Many brokerages, like Five Star Business Brokers, ensure the confidentiality of the sales process, and work diligently to ‘hold the deal together’ so that your business will actually sell.
Business Listing Advertising – Self-Promotion vs Professional Services
Advertising and presenting a business for sale is no easy task. It first involves properly gathering, analyzing, and intelligently presenting the financials of the business (along with a detailed write-up of the business which explains its operations, staffing, and future growth possibilities) to potential buyers.
Very few sellers have the experience or time to prepare such documentation. Additionally, the business must be prominently advertised (confidentially) in several websites and publications where prospective buyers can see the listing. The more buyers that see a business for sale and have an opportunity to buy the business, the higher price the seller will receive!
Properly advertising and presenting a business must be performed in a way that grabs the buyer’s attention, gives the buyer enough publicly available information to proceed with finding out more (non-publicly available) information, and maintains the confidentiality of the business.
Mistakes Business Sellers Make When Selling Their Own Business
In the experience of Martin at Five Star Business Brokers, almost no sellers properly advertise and present their business for sale. They usually place an ad on craigslist, and do not have a proper ‘listing package’ that they can present to buyers. Such a short-sighted approach will only invite ‘tire-kickers’, waste the seller’s valuable time, and potentially harm the business by not keeping the process confidential.
Why Selling Yourself Can Cause Business Disruptions
Most business brokers in Palm Beach County require every potential buyer to sign a non-disclosure agreement before being given any confidential information about a business (including the name of the business or the city of where the business is located). This is primarily because a business can be seriously harmed if their competitors, customers, suppliers, or – most importantly – their employees know that the business is for sale.
If a seller is trying to sell his or her business on their own, it is virtually impossible to keep the sale confidential. In the dawn of Google, any name or phone number that is disclosed in a ‘business for sale’ advertisement will inevitably result in the prospective buyer finding out the name of the business. If a seller is ok with such a scenario…beware!
Protecting Your Business and Reputation
Many unscrupulous prospective buyers – or simply competitors who see the advertisement – can wreak havoc on a business that they know is for sale. Employees and customers can be stolen, business can be interrupted by ‘walk-ins’ from buyers seeing the ad, and even landlords can make lives miserable for tenants who are known to have their business for sale. Always keep the listing and advertising process confidential..it is the seller’s best defense against harming their business during the sales process.
Steps Business Brokers Take To Close The Sale
When a buyer is found, an experienced and professional business broker should always serve to ‘hold the deal together’.
The business broker you choose should specialize in ensuring that:
- Once negotiations commence and up until closing – both sides of a deal communicate properly
- Perform due diligence with minimal stress on the seller while giving a buyer the sufficient information they are seeking
- Handling the assumption of the lease professionally
- Intervening when the inevitable problems arise.
- Educating both sides so they know what to expect (surprises are what usually kills a deal!) is also extremely important.
Without this ‘glue’ that holds a deal together, a seller may find themselves in the unenviable position of having wasted their valuable time and resources in securing a buyer, but only to have the deal fall apart before its completion.
Business Broker Serving South Florida
Five Star Business Brokers Helps Business Sellers in Palm Beach County
Do it right the first time! Hire a professional business broker to sell your business. You’ll end up getting far more advertising exposure, ensuring the confidentiality of the sales process, and avoid a tremendous amount of risk when trying to sell on your own.
Give Martin at Five Star Business Brokers of Palm Beach County a call today for a free evaluation for your business at (561) 827-1181.