Are you looking to buy a business? Or maybe sell one? Before you go very far in the sales or purchase process, you'll need to decide whether you're going to handle everything yourself or use the services of business brokers. How can you best make that decision and what factors should you consider? Lets look at some of the pros and cons of business brokers.
Business brokers are third parties that handle the details when you buy or sell a business. They aren't the business owner who is selling, nor are they the buyer who will soon own a new business. They are essentially like real estate agents, professionals who bring buyers and sellers together, facilitate the negotiation, and handle the transaction once the deal is made.
The Pros of Business Brokers
There are several good reasons to use business brokers instead of handling the business sale yourself. One of the best reasons is time savings. Selling a business can take a particularly large amount of time. There are many documents that are required before the sale can take place. You can either take the time to put this documentation together on your own, or you can let a business broker assemble these documents for you. If anything, documentation requirements increase during the sale process.
Business brokers can also save time by qualifying prospects. Advertisements that let everyone know your business is for sale may attract potential buyers who actually don't have the potential to buy at all. Business brokers are experienced at weeding out the "tire kickers" and bringing only the serious buyers to the negotiating table.
In fact, if business brokers are doing their jobs well, they should be maintaining lists of prospects who are ready to buy. If you choose to sell your business through a broker, advertising the sale might not even be necessary. If you're interested in buying a business, you may be able to find the sort of business you're looking for more quickly by working with business brokers.
Another good reason to use business brokers is being able to profit from their experience. If you're buying a business, you may have already bought several and have all the experience you need. However, selling your business typically occurs less often, so you don't have as many chances to learn how. Because brokers buy and sell businesses all the time, they have accumulated quite a bit of experience.
Business brokers are often used when buyers or sellers want to maintain confidentiality. In some arenas, all the players are so well known that the market itself could be changed by knowledge of a pending sale or purchase.
The Cons of Business Brokers
Maybe a better way to word that would have been the "downsides" of using business brokers. There's really no reason to expect that business brokers are likely to con you, but there are a couple of reasons why you might want to consider selling or buying a business on your own.
First of all, remember that business brokers charge commissions. There is a lot of work involved in these types of transactions, and if a broker is going to handle everything, he's going to want some compensation out of the deal. Someone, either the business seller or buyer, will be charged by the business broker.
There's no guarantee that business brokers will have your best interests in mind. Again, like a real estate agent, the broker will either be working on behalf of the buyer or the seller. The information that he provides about the business will probably be truthful, but might be "spun" to make a business more attractive to increase the chances of a successful deal.
If you're buying or selling in a specialized industry, business brokers might not have the specific industry knowledge that's required. In these cases, you're probably better off working on your own if you have insider information that's difficult for those outside the business to comprehend.
Finally, a broker might not have your passion for the business or the strong desire to see the deal completed. You should keep in mind, though, that passion and emotion generally don't belong in the sale or purchase of a business. The emotional detachment of a business broker might be exactly what you need.
Related Articles
Do I Really Need a Business Broker?
By: Jim Mcdonald | 19/07/2007 | Business
Business brokers can take the difficult, complicated process of selling or buying a business and turn it into a smooth, almost effortless affair. There are excellent reasons to bring business brokers into your business sale or purchase--they save time, keep things confidential and have a lot of experience they can bring to the table. However, purchasing or selling your business has advantages and benefits of its own. This article tries to discover the truth--do you really need a business broker.
Finding the Right Listing Broker to Sell your Business
By: Willard Michlin | 21/09/2007 | Business
What makes Kismet Business Brokers different from every other Business Broker in town? It is the way we advertise our listings. Let me explain. Kismet has developed a marketing strategy that has been applauded by other brokers and is incredible. It took 5 years of research and testing to get it right. Other brokers have not, even now been willing to take the time and money to institute this system.
Patel Shines With Sunbelt Business Brokerage Chain
By: SunbeltNE | 19/12/2007 | Entrepreneurship
Patel is the Chief Executive Officer and President of Sunbelt Business Sales and Acquisitions franchise in New England that has four offices in Massachusetts, and plans to expand to another six offices over the next three years. SunbeltNE also focusses on mid-market Mergers and Acquisitions deals. Patel commands the reputation as one of the leading business brokers in entire New England.
Houston - a World-class City and Economic Powerhouse
By: Rose Stabler | 30/12/2007 | Small Business
These new and existing developments demonstrate the city's commitment to keep in step with its ever-increasing population, international presence, and business growth. Houston hosts many leading market niches in the country and cannot be wholly defined by a single industry. With a dynamic economy that shows little signs of slowing, Houston has made its debut as a world-class city.
Buying an Established Business
By: Donald Arson | 30/06/2008 | Business Opportunities
When considering buying an established business it’s always a good idea to first ask yourself , is buying an existing business the way to go or would myself and the community be better served by starting a business from scratch?
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
Would there be any harm to a private business ...
By: drabsv | 03-07-2008
Would there be any harm to a private business enterprise if they keep their whole (monthly) budget open to the public?
What is SmartGreenUSA?
By: clm168 | 24-06-2008
What is SmartGreenUSA?
Family Business as a Job
By: MarilynBB | 21-06-2008
Would you like to work in a business run by one of your family members? Why or why not?
I assume that there are two types of organisations ...
By: drabsv | 18-06-2008
I assume that there are two types of organisations according to the relation structure-people:(1) organisations which expect employees to adapt to their rules, roles and conditions of work. If there are not enough candidates, these organisations react by either increasing salaries or by coercing people to work there through various mechansims - manipulating unemployment rate (e.g. outsourcing work to overpopulated Asia, letting immigrants in); mandatory labour service/ military service; etc. In brief: "the individual must fit into the system". An example of a policy of such organisation: "working time is set Monday till Friday, from 8 am till 5 p.m".(2) organisations which create their rules, roles and work habitats with the human in mind, from the very outset; they also maintain feedback loops to change (improve) those rules, roles and conditions for work when necessary. In brief: "the individual must fit to the system and system must fit to the individual".An example of a policy of such organisation: "the working day is 8 hours; standard working time is set Monday till Friday, from 8 am till 5 p.m but you can arrange with our managers a different schedule, convenient to you". If my assumption is correct, any examples of type (2) organisations?
Who would like to develop a trust business relationship and benefit from the great links I have for sale?
By: shmitche | 27-05-2008
I need trust based business relationship because... This is what I have to offer: 1)Permanent one way links. 2)In a network of 1000's of untapped websites: PR2 ? PR5 only (Class ? C). 3)Unique handwritten content only in this network and every post. 4)You can target and rank for any text link keyword you choose. 5)You can direct your link to any page you choose in your website. 6)Completely untraceable. 7)Only 5 dollars a link. 8)Content and links are distributed naturally (chosen from options by buyer through me) for SEO. Restrictions: 1)No porn, gambling, or black hat websites or cheap websites. I will have to authorize the site. 2)Security is tight there are no reports (I don?t have access for my own sites) only yahoo link search and a jump in rankings and traffic will be evident. 3)I only want to sell once a month to one client. 4)I will only sell $500 - $600. per month 5)Payment must be upfront (A must for system to work) 6)Will not reveal my source. Contact me for any questions.
I hate my boss. Should I quit?
By: Jase | 05-05-2008
I don't get along with my boss, and I'm really sick and tired of my job.Should I stay till I find something else, or would it be better if I just left?
Q&A Powered by:
Latest Business Articles
The Basics of Creating a Filing System That You Can Benefit From Starting Today
By: Tracey Lawton | 19/07/2008
In my brand-new article, I'm going to share with you 7 easy steps for getting your filing system in place. The summertime is generally a quieter time with a more slower pace of business, so use this time to get one of your core office systems in place.
The 9 Things You Will Want to Include in Your Email Newsletters
By: Katrina Sawa | 19/07/2008
You probably get numerous newsletters across your desk each month. How many of those do you really read? I am sure that you scan certain newsletters for valuable information, while you just toss others. Then, of course, there those like mine (chuckle), which you read every last word of.
How to Establish yourself as an Expert
By: Katrina Sawa | 18/07/2008
Establishing yourself as an Expert in your field is a great way to get added exposure, publicity and credibility for you and your business which will ultimately bring you more sales and more money!!
Women Owning the Workplace: Tips to Guide Female Entrepreneurs
By: Melissa Mashtonio | 18/07/2008
Women are taking the business world by storm, and it doesn't look like they're backing down. According the Womenentrepreneur.com, women-owned firms are the fastest growing in the country. Women are looking beyond the traditional roles and moving ahead to a new role: entrepreneur. This does not necessarily mean women are...
Getting Ahead in the Construction Industry
By: Duncan Freer | 18/07/2008
With new regeneration and Government housing targets, the construction industry is facing the toughest challenges yet. With new projects in commercial and residential developments, growing pressures for sustainable and low impact development and the need for low cost housing, better and faster results are being expected from everyone involved in...
Getting Ahead In The Rail Industry
By: Duncan Freer | 18/07/2008
The rail industry is a greener alternative for travel than any other method at the moment, and as a result is beginning to see an increase in investment and public interest. With the Government and business regulators placing such a huge emphasis on offsetting personal and private carbon emissions it...
Getting Ahead in the Utilities Industry
By: Duncan Freer | 18/07/2008
The Utilities industry is currently facing rapid change and is having to adapt to the many new demands made on it by existing and potential customers. Once dominated by state-run monopolies, the utilities sector of the twenty first century is shifting to respond to emerging competitors who are increasingly savvy...
Recessions Require Leadership From the Core!
By: Axel Meierhoefer | 18/07/2008
When things are going tough, leaders need to step up and deliver more than every. LEading fomr the core is what we need to succeed
Business 
