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The
Business Broker and the Buyer
Business
brokers prefer to talk to people in person, and the buyer is
no exception. During a preliminary meeting in the
business brokerage office, the broker will typically ask the
prospective buyer question such as these:
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Do
you have the necessary funds to buy a business?
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Is
the cash readily available?
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What
is your time-frame for buying a business?
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What
are you expectations about the purchase of a business?
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What
are your best skills, and what type of work do you like
to do?
After
this fact-finding meeting, the broker can then show the
buyer businesses that are both feasible and that fit the
buyer's requirements. Further steps the broker will
lead the buyer through are as follows:
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Since
sellers are (rightly) concerned about confidentiality,
the broker will ask the prospective buyer to sign a
non-disclosure or confidentiality agreement.
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The
broker will provide the prospective buyer with
preliminary information about one or more businesses,
including pertinent financial data.
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The
broker will arrange for the buyer to see businesses of
interest.
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Once
the buyer has indicated strong interest in a particular
business, the broker can then supply additional
information and schedule further on-site appointments.
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When
the buyer is ready, the business broker will be the best
source for answering questions, addressing concerns,
resolving loose ends, discussing deal structure, and
offering a business broker's unique expertise in the
business sale transaction.
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The
Business Broker and the Seller
When
it comes time to sell, one of the best decisions a business
owner can make is to continue managing his or her business
efficiently (and profitably), while depending on the
services of a business broker to orchestrate the steps of
the sale. To make the seller's job easier and more
effective, the business broker will...
...Determine
the right buyer for a particular business. For
locating and qualify prospective buyers, a business broker
uses computerized databases to access compressive lists of
local, national and international buyers - all to increase
the chances of selling a business at peak value.
...Advise
the seller on pricing. The business broker is an
expert in placing a realistic price on the business and incorporating intangibles: thus reducing the
danger that every seller fears - under pricing the
business. Many times the business broker will work
with the seller to obtain an independent business
valuation report to determine the proper value. At
the same time, the business broker can help the seller to
understand that the selling price was dictated by the
marketplace - not by a well-meaning accountant or friend
who may have an unrealistic idea of what the business is
worth.
...Prepare
a marketing strategy and offer advice about essential
marketing tools, such as a business description
memorandum: in fact, the broker will help the seller
in all key aspects of presenting the business as
effectively as possible. Later, the broker also can
help in the structuring of the sale transaction.
...Present
offers and point out both strengths and weaknesses.
The business broker will be vital advisor during most
stages of the negotiation, bringing to "the
table" objective as well as negotiation skills
developed through the years of experience in the buying
and selling of businesses.
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