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How to Sell Your Business
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Article 6: Finding A Broker For Your Business
Good sales people make great deals. When it comes time to sell your business, who will do the selling?
The answer, for large companies, is very often an investment banker such as Morgan Stanley or Bear Stearns. These organizations find potential buyers and handle negotiations. If your business is small, it’s unlikely that you’ll interest a large investment banker. Chances are, you will instead deal with one of the many business brokers who perform the functions of investment bankers on a smaller scale.
It’s important to pick the right broker. First, you want someone who is discreet.
“It’s a bad thing when a pending sale becomes public knowledge,” cautions Ted Burbank, a business broker in Wellesley, Mass. “Employees get nervous. Competitors take advantage. Lenders call notes. So as a business owner you want confidentiality.”
Additionally, you want a broker who has experience selling your type of business. You should select a broker who will take an interest in your company, study it in depth, and then market your organization to the buyers who are likely to pay top price. Retained brokers often charge commissions of from 5 percent to 10 percent for handling smaller companies, but these figures are negotiable.
You can find brokers by searching the database of the International Business Brokers Association (IBBA). Another source is the database of more than 2,500 brokers at www.BizBuySell.com. You can also ask for leads from your chamber of commerce and ask other businesses in your area, especially those which have been recently sold.
The Internet has become an integral part of business transactions in most every industry. Would anyone be surprised to hear that businesses are now being bought and sold on the Web? One active such site is www.BizBuySell, which claims to have more than 40,000 businesses for sale at any one time.
“The benefit to our service is that you can expose your business to a nationwide audience of potential buyers,” says Mike Handelsman, general manager. “Industry data show that as many as 40 percent of businesses are sold to buyers outside their immediate area.”
A second benefit to Web-based transactions, says Handelsman, is that costs are low. A standard listing costs less than $200 for a two-month period.
Of course, no Web-based transaction will take the place of a skilled broker. Any Internet listing will possess a selling power that is broader than it is deep. So look upon the Web as an extra in your selling effort.
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How to Sell Your Business
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