It’s a fact that business brokers have the expertise to conduct the sale of businesses better than real estate agents - so it's odd that so many sellers opt for the latter.
The sale of a business involves many things beyond the plot of land it sits on and the building in which it resides. It entails a comprehensive valuation, transfer of clients, contracts, employees, lease assignments, stock and more.
At some point, every business owner will become separated, either voluntarily or involuntarily, from their business and making a decent sale goes a long way to alleviating any emotional loss.
Employing a business broker is vital to those owners who value confidentiality, as the process can protect the owner from having their employees or customers know a sale is happening.
A business broker performs many niche services, such as the business valuation, marketing of the listing, interviewing qualified potential buyers, and negotiating the terms of the sale. They can also help with the financial process to determine capital requirements and identify future changes in circumstance.
For the most part, the ability to conduct business valuations represents the most significant difference between a business broker and a real estate agent. Brokers have been trained to understand that a business has a fair market value, investment value for future owners, and an intrinsic value to the current owner.
These values depend on the premise on which the valuation has been contracted. Brokers analyze global, national, and local economic circumstances to guide the valuation, study the company’s current assets and future potential, and adjust the finances to current market conditions.
For these reasons, business brokers make better representatives in the buying and selling of a business than real estate agents. They have an intimate knowledge of the particulars involved in selling a business and their many moving parts.
Some business brokers are independent while others are part of a network such as VR Business Brokers. Both may provide the full range of services to their clients to conduct the acquisition or divestiture of a business, however some are more specialized. Be sure to choose carefully when selecting an Intermediary to best fit your needs.
Peter King is CEO of VR Business Brokers, the world's leading network of professional business intermediaries.
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