Unless you’ve had personal experience with a Business Broker, business brokering is probably a bit of a mystery. Do business brokers just walk in and put a price on your business and sell it or find you the perfect business? Are they only there to help you or do they focus on their inventory, wants and needs? In our 20+ years working with current business owners to exit and future business owners, we’ve cleared up a lot of confusion about what we do—and what we don’t do.
Here are five of the most common misconceptions we see.
1. Business Brokers only help those who cannot sell their businesses themselves
This misconception is unfortunate because it can lead many owners of stable (and profitable) businesses away from expert assistance, thinking they have nothing to lose if they sell it themselves. But Delta Business Advisors aren’t just for burnt-out business owners who want out due to a constant state of overwhelm. We also help good companies and great ones. In fact, if you looked at many of the businesses Delta Business Advisors assisted owners in maximizing their profits.
Sometimes we work with the owner during the Preparation phase. Here, we assist the owner in growing the business that’s not dependent on him or her or solidifying loyal employees and clients/customers. The point is, we can help any owner who has decided it is time to move on and want to maximize the amount that they retain at close of sale.
2. Business Brokers “Value” a Business
Delta Business Advisors typically do not provide appraisals, however, we provide a Brokers Opinion of Value or Most Probable Sales Price. This analysis provides a gauge as to what a buyer will most likely pay in the current market. But the true value lies in providing Business Owners a realistic expectation of what a buyer will pay, setting everyone up for a successful transition. So, it makes sense that people would often make the mistake of thinking Delta Business Advisors are—more or less—like full-blown Certified Appraisers. But this is a big misconception. However, we do have Certified Appraisers we work with when needed.
3. Business Brokers Sell Every Business Listed
One of the industries not so secret statistics is that 80% of businesses listed for sale do NOT sell. The top 2 reasons that businesses do not make it to the closing table are 1) poor financial and operational books and records and b) unrealistic seller expectations. That is why we at Delta Business Advisors work with Sellers who are have realistic expectations and verifiable books and records. That is why we at Delta Business Advisors focus on working with sellers who have realistic expectations and ideally, verifiable books and records.
4. Business Brokers Only Represent One Party
If an owner comes in thinking their Delta Business Advisors is a Buyer Only or Seller Only Agent, then that may be true or false.
Delta Business Advisors may be dual agents or limited dual agents, with written consent of BOTH Seller and Buyer. This means that IF there is a potential buyer in the database or another Delta Business Advisors has a potential Buyer, then the transaction can move forward. Although we work (co-broke) with other business brokers, for Main Street Business Owners, we at Delta Business Advisors typically represent both parties.
5. A Business Broker’s ‘Job’ is finished When the Sale Closes
A Business Broker’s ‘job’ is transactional – to get a Seller and Buyer to the Closing Table and moving on to the Next Phase of their lives. Delta Business Advisors know that there are going to be things that come up on both sides and just as during the pre-Due Diligence, Due Diligence and working with Sellers and Buyers throughout the process of selling or purchasing a business, we are there to assist from Closing Checklists to Follow-Up Check-In calls.
In closing, we at Delta Business Advisors work with you, the business owner, to create a situation that significantly increases the odds of Selling Your Business and/or Acquiring a Business. From understanding what a realistic purchase price will be, structuring the deal to maximize your profit or at least meet your goals (be that taking care of your employees and customers are taken care of or your continued or non-continued engagement in the company), and finding a New Owner who will succeed in growing their new company/your former company