Reasons to Hire a Broker

Reasons for Sellers Hiring Brokers

  1. Brokers or advisors have access to a database of potential buyers and investors.
  2. Brokers pay and run advertising.
  3. Affiliated brokerage or advisory offices may attract more buyers.
  4. Brokers can assist during escrow closing.
  5. Brokers/Advisors can run a background check on potential buyers.
  6. Broker or advisor can confer with the seller, and legal and tax counsel about terms of sale.
  7. Broker or advisor understands and can depersonalize negotiations.
  8. Brokers and advisors enable buyers and sellers to access a broader pool of potential partners.
  9. Brokers and advisors have broader third-party prospective from done and failed deals.
  10. Brokers and some advisors know how to sell businesses; most sellers don’t.
  11. Brokers give business advice regarding contracts (exclusive of legal advice).
  12. Buyer competition: Brokers create and manage it.
  13. Brokers coach sellers to answer buyers’ questions and concerns.
  14. The compensation basis of brokers is commission upon sale or partially contingent upon done deal.
  15. Brokers compile necessary information about the business.
  16. Brokers know how to preserve confidentiality, and know what to show buyers and when.
  17. Continual follow-up with buyers for decisions.
  18. Control buyers: Brokers and some advisors know what is appropriate and inappropriate.
  19. Dealmaking team: Referral to accountants, appraisers, brokers and lawyers.
  20. Deals almost die numerous times; brokers and some advisors know how to revive them.
  21. Define the best probable price and terms before going to market.
  22. Determine the best offer price.
  23. Determine the best selling price.
  24. Determine the best time to offer a business for sale.
  25. Develop marketing strategy and plan its implementation.
  26. Disclose to buyers sensitive information about the business.
  27. Explain and handhold seller throughout selling process.
  28. Financial analysis and recasting.
  29. Help the buyer obtain financing.
  30. Initiate contact with likely purchasers.
  31. Intermediary can speak for the seller.
  32. Maximize price buyers will pay for the business.
  33. Mediate and negotiate with buyers.
  34. Minimize interference with seller’s management or company.
  35. Most buyers start with business brokers and internet searches.
  36. Negotiating strategy.
  37. Owner does not know how to find buyers.
  38. Owner doesn’t know the probable price buyers will pay.
  39. Owner needs quick sale due to pressing crisis.
  40. Owner referred to broker or advisor by happy seller.
  41. Prepare owner to sell and prepare business for sale.
  42. Prepare two versions of the business profile (teaser and full).
  43. Professional advisor recommends that owner hire a broker or advisor.
  44. Qualify and screen buyers.
  45. Receive, present and help evaluate purchase offers.
  46. Reconcile differences between tax returns and financial statements.
  47. Reduce frustration during offering and sales process.
  48. See the business from the perspective of buyers.
  49. Seller does not have a network of contacts with access to buyers.
  50. Seller does not understand the implications between strategic and financial buyers.
  51. Seller doesn’t want to be distracted from running the business.
  52. Seller fears adverse effect of premature disclosure (about sale) to key employees and lenders.
  53. Showcase the seller’s business to buyers.
  54. Time savings broker or advisor provides sellers.
  55. Understand local marketplace of businesses for sale.
  56. Understand seller’s industry.
  57. Unsolicited offer from a buyer requires expert help.