Is It Worth Contracting a Business Broker When I Sell My Company?
Selling your business is an exciting time, as it likely means you’re retiring or moving onto a new venture. All too often, though, making a sale is harder than it sounds.
Some business owners are determined to stick it out and make the sale alone. Others call in business brokers.
If you’re like many business owners who are preparing to sell, you might find yourself wondering whether contracting a business broker is worth the trouble. Here are a few questions to ask yourself as you make this key decision.
Do I Have a Buyer in Mind?
Many business owners who sell independently do so because they already have an interested buyer lined up. If you plan on selling your business to an employee or existing contact, you may not need to hire a broker — you can simply work out the details with your buyer and make it official.
On the other hand, if you’re ready to sell but don’t have a prospective buyer, a broker can be a tremendous help. Brokers maintain networks of eager, qualified buyers. And because your broker is invested in getting you the best sale price possible, they can encourage interested parties to bid against one another.
Do I Have the Time to Coordinate the Sale?
Selling a business isn’t like selling a car. It’s a sustained effort with endless loose ends to tie up.If you’re an owner-operator or are otherwise deeply involved in the day-to-day operations of your business, you’ll likely find it overwhelming to add managing and coordinating a sale to the mix. However, if the role you play is relatively hands-off, you might be able to find the time.
Am I Familiar With the Sales Process?
One of the primary advantages business brokers offer is that they know exactly what steps must be taken to make a successful sale. A good broker will be able to ensure that you get an accurate valuation and help you negotiate a deal with the buyer you choose. They’ll also be able to guide you through the closing process.
In all the intricacies of the sale itself, it’s easy to forget about another important element: taxes. If you’ve never sold a business before, you may find it challenging to fully grasp the resulting tax consequences.
Taxes aren’t an area where you want to make a mistake, either. If you don’t file all necessary paperwork with the IRS or pay the appropriate amount, you could be charged with tax fraud. A good broker will help you handle all taxes associated with selling your business.
Take Time to Consider Whether a Business Broker Is Right for You
In nearly every situation, a business broker can facilitate a faster sale (and get you a better price) than if you sold your business on your own. That being said, not all business brokers are created equal.
Before committing to one, make sure you do your due diligence. When you take the time to find the right broker, they’ll be able to find you the right buyer in turn.
