Selling a Business? Working With an Experienced Business Broker will Increase Your Chances

Feedback from industry reports suggests that of those businesses put up for sale, only half will successfully sell. Having a trusted business broker at the helm increases the odds the business will transact.

Mergers & Acquisition Advisors cited ‘unrealistic seller value expectation’ as the top reason deals fall apart. Economic uncertainty and poor financials were other leading factors.

When selling a business, the market ultimately determines the value, not what the seller wants, or needs. A good place to start is a cash flow multiple, but the value is somewhat subjective. Many factors contribute to this, including how many buyers are in the market at any particular time, and how long they are willing to wait in order to realize their return on investment.

Many Business Brokers will turn away sellers if their expectations are not in line with reality. Some business sellers will try to convince their business broker to ‘shoot for the stars.’ It’s unfortunate because that could do a lot of harm by testing the market with unrealistic expectations. In this scenario, business brokers burn through many buyers, risk confidentiality, and lose the trust of quality buyers.

Selecting a qualified business broker is essential, and it’s also important to be prepared with good financial records to keep a transaction process moving along quickly. Time kills deals. When momentum is stalled, there’s a good chance that buyers find other opportunities. Business owners who want to sell their business should be ready for due diligence and make sure their numbers and record are in order before going to market with the sale of a business.