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7 Reasons to Hire a Business Broker to Sell Your Business

Are you considering selling your business? Trying to sell a small business is difficult. Most sellers find it a difficult process, from the first valuation and confidential marketing to buyer questions, myriad extensive research requests, and a bombardment of legal documents.

Although business owners understand how to run their businesses, they are typically inexperienced in the business sale process and haven’t spent time preparing.

Besides, good business brokers understand how to manage this process and can be valuable to owners.

There are many reasons why working with a business broker near me is a good idea. Here we look at seven ways the best business broker can help to sell a company.

1. Access To A Larger Market Of Potential Buyers

Selling your business through the services of a broker is much like working with a real estate agent to sell your home. When you hire a broker, they market your business while still maintaining a level of confidentiality you won’t get by posting your business on public websites.

Some details need to be concealed from the public as they can negatively affect customers, employees, etc. Thus, a broker will help you hide specific details such as business name, location, product, and services.

Furthermore, brokers have a wealth of market knowledge for your business type. They also have vast resources that include a personal network that can help you reach more potential buyers.

2. Determines The Value Of Your Business

Weighing the value of your business can be harder than pricing a house.

Every business is different and has many variables that may impact its value. But brokers have access to hundred databases that they can use as a reference point. A broker will value your business based on other similar businesses they have sold.

Also, a broker can value your business based on the income’ cap rates’, which is commonly used by commercial and real estate businesses. A broker can also utilize investment return rates, carry-back capability, historical cash flow, and amount of debt to determine the value of your business.

But the only way a seller will feel assured of the best deal is to get several bidders for the business. This scenario is possible with the resources professional brokers have.

3. Emotional Detachment

A broker as a third party is likely better positioned to negotiate a better deal with buyers.

Furthermore, most business owners have an emotional connection to their business, and negotiating their own business can be a traumatic experience. A broker will bring an objective perspective and help you see your business from the buyer’s viewpoint.

This will help you be more realistic in understanding the financial and economic factors that buyers also consider. Furthermore, the business must continue running during the sale process until the transaction is finalized.

Thus, you will have enough time to run your business.

4. Problem-Solving Experience

A broker will help in the managing of the sales process.

It is worth noting that the process of selling businesses is more complex than selling real estate. You will note that there are more steps in selling a business than a real estate business. Additionally, more problems need to be solved in the process.

For instance, a broker must determine the valuation, negotiate a price, keep clients financial and accounting records in order and go through the escrow before closing the sale.

Furthermore, a broker will facilitate buyers and seller meetings and interviews. The broker will also manage the meetings and provide timely and sequential information while resolving any conflict.

Additionally, the who process may belong, and a broker can spend up to 24 months building a referrals network.

5. Prepares Presentation To Potential Buyers

Before the negotiation, the business sale agent will prepare all your information to create a presentation that includes research documents and reviews. These documents show a brief overview of the business, its past, and the projected future performance.

Also, a broker will determine the right protocol for negotiation, which will depend on the number of bids.

Business transfers are not just about signing an agreement. There are fixtures, equipment, and others like intellectual property; a good broker can negotiate the value of tangible and intangible items.

Negotiation skills are important for a successful selling or buying of a business.

6. Assist Buyers In Accessing Financing

It has become more challenging to find small business purchase financing in the past years.

However, a broker can help a prequalified buyer get a loan. With their extensive network, brokers can also give feedback to potential buyers who can’t afford to purchase with their savings about their viability to get a loan.

A broker is simply keen on safeguarding every aspect of the deal to ensure a closing occurs.

7. Higher Selling Price

A broker will appealingly present the business to get buyers to pay the price you desire.

If a seller does not hire a broker, they won’t know how to manage competitive bidding and increase offering prices. Contrarily, if you hire an agent to sell your business, you are most likely to get a higher price than in a situation where you negotiate the deal yourself.

Hire A Business Broker Today

You might be an expert in running your business but fail to have the experience and skills needed to close a deal successfully.
Are you looking for an ST Louis business broker?

At Fusion Business Services, we are the best brokerage service with a fully integrated process to help clients understand their business sale and purchase options. We are totally confident about our in-depth planning session to help you make the best decision regarding your sale or acquisition.

Contact us today to boost the sale of your business.

8 Signs It’s Time to Sell Your St. Louis Business

About 50% of business owners try to sell their businesses themselves, and most of them fail.

Deciding to sell your St. Louis business can be heartbreaking because you’ve spent years building it – it practically becomes your baby. However, you also need to ensure that you sell it at the right time to ensure maximum investment return.

With that in mind, here is a look at top indicators that it’s time to sell your business and how Fusion can help you.

1. New Opportunities

Most entrepreneurs land new opportunities, even when their ventures are doing well. The opportunities come in different forms, including a new business, a role in a larger organization, or something that offers more.

And while you might always say “no,” there may come a time when you are conflicted between moving on and staying in your business. This is particularly true if you are ready for a new challenge and feel that the opportunity could be your chance. When that time comes, it might be time to sell your business.

Otherwise, you will regret not taking the chance to try something new.

2. You Lack Motivation and Ideas

Despite your best efforts, there comes a time when we hit a creative dead end. Business owners in this situation find themselves without ideas on keeping their venture afloat.

As a result, the workflow and business sales suffer. Running a business is hard enough without worrying about how your burnout will affect your venture.

So what can you do?

Rather than force unlikely business results, it may be best to accept failure to grow. There is no harm in moving on, especially if running a business is no longer a motivating and fulfilling experience. Consider selling your St. Louis business if you start experiencing entrepreneur burnout.

3. The Business Can Run Without You

When investors shop for a business for sale, they buy companies in different states. However, the companies that attract the best prices are the ones that can continue running profitably.

A business that can run independently is more viable because buyers only need to invest financially. They don’t need to be active participants.

Does that describe your business? Can your business run itself? If so, you’re likely to get a bigger payout. This doesn’t mean you can’t sell if your business doesn’t run independently yet. It just means you should take time to develop it so it doesn’t rely on your day-to-day presence.

Once you have done all you can for the company, you can sell it to someone who can appreciate your hard work and earn a bigger payout at the same time.

4. You Have Fallen Behind on Industry Trends

The emergence of the digital era has transformed the world of business. Traditional ways of doing business are no longer reliable, especially if you hope to dominate the market and become an authority in your niche.

Entrepreneurs have to adapt and meet market demands. Unfortunately, not all business owners get in line with moving industry trends.

All too soon, they find themselves outmatched by competitors because their services:

• Can no longer compete with larger and more aggressive companies
• Have become obsolete
• The business model is not viable enough to stay afloat

If you have fallen behind industry trends and fear you have nothing more to offer, it might be best to sell the company. It can be a difficult pill to swallow, primarily if you have invested years into building the business.

However, the market will quickly swallow you up if you wait too long to sell and reduce the value of what you could get for the company.

5. The Business Has Outgrown Your Skills

As your company grows, there may come a time when you realize you are no longer an asset to the business. And while it’s hard to accept, honest entrepreneurs can often come to that realization by themselves.

For instance, business owners often make good salespeople. But when the company generates $5+ million in annual revenues, it demands more leadership than your skills can deliver.

Having the courage to admit that and take the appropriate steps to ensure the business’s success is crucial. And while you can learn and grow with the company, it’s also okay to sell it to someone who can take it further.

6. Your Professional Aspirations Have Changed

There is no shame in admitting that the venture you spent your life building doesn’t do it anymore. People develop new dreams or realize that they aren’t cut out for a particular type of business. When that happens, it’s best to sell your company and find a new passion.

But all isn’t lost. You can use the money from the sale of your St. Louis business to fund a new venture. Whether it is a new job, returning to school, or a new startup, fresh starts can be pretty exhilarating.

7. You Can No Longer Tolerate the Risk

Entrepreneurs often have to carry the risk of their company’s profits and losses. Sometimes, this can mean celebrating big wins while barely earning a salary at other times. During the early stage of the business, existing on a tight budget and not worrying too much about losses is normal and exciting.

But as you get closer to retirement, your financial needs change, and it becomes more critical to minimize risk. Whatever the case, selling your business might be the best to reduce the risk to your financial profile.

8. You are Ready for Retirement

Beyond financial reasons for selling a business, life events like the death of a partner, health deterioration, or divorce can force your hand. Other compelling reasons for retirement include stress and not wanting to manage the company daily.

Whatever the reasons for retirement, the sale of your St. Louis business might be the best cause of action. The income generated from the sale can help fund your future. Just be sure to make the company as attractive to buyers as possible to maximize the sale value.

Sell Your Business with Fusion

Do you think it’s time to sell your St. Louis business? At Fusion, we are dedicated to providing valuable selling tips and guidance on selling businesses. From pricing and valuation issues to exit strategies, we strive to ensure the sale of your business goes smoothly.

Register here if you want to sell your business with no stress.

How Long Does It Take to Sell a Business in St. Louis?

Imagine working on your dream business for years, but retirement is finally upon you. Or maybe you’re ready to move on to your next venture.

No matter your reason, you should know how long it might take to sell a business in St. Louis. Then, you can sell it at the right time for you.

Keep reading to learn what goes into the timeline for selling a company.

Type of Business

One of the biggest factors that can affect the time it will take to sell a business is the type of business you have. Overall, you can expect to spend about 30 to 90 days from when your first list the business for sale before the sale closes.

But some businesses may sell faster or not nearly as fast. You should consider the demand for a business like yours. Take a look at other businesses for sale in St. Louis.

Then, you can figure out how long the listings have been up and compare that to the industry and type of each business. Knowing that can help set yourself apart, such as in the pricing or marketing of your St. Louis business.

Business Structure

Another thing that can affect the timeline for selling a business is the business structure. Some buyers may be okay with taking over a sole proprietorship or partnership where they have to work in the business.

However, other buyers may prefer an LLC or corporation that has a team to conduct the daily tasks. Think about how much time you spend in the business right now.

You may still be able to get a quick sale of a business that involves the owner. But you should prepare to find the right buyer to make sure that they’ll want to run the business successfully.

When You List

As you think about your industry and business structure, you can determine the best time to list your business. For example, a landscaping company may not sell fast if you list it in the winter.

On the other hand, a business with college students as its main customer base may sell well then. But you’d struggle to sell that type of business in June when college students are out of town for the summer.

Consider when you might want to buy the type of business you’re looking to sell. Then, you can make sure to list it early enough to beat your competitors but late enough that you can still get some interest.

Marketing the Sale

You should also figure out how to market your business for sale. Of course, you can market the business on your personal and professional social media accounts.

But you may want to work with business brokers to help get your business in front of potential buyers. The more places you can promote your listing and the more times you can share it, the easier it will be to find the right buyer.

Even if you need to sell a business in the off-season, you may still get some interest if you promote it enough. You might even get the amount of money you want as well.

The Buyer

The timeline for selling a company can also depend on the buyer you select. They may need to get a loan or other funding before you can close on the sale, so you might need to wait a while.

Of course, you can ask a buyer about their funding source for the purchase. Then, you will be able to decide if you want to wait for them to get a loan before you can sell the business.

If you don’t want to wait for a loan, you can find another buyer. But at some point, waiting for a loan may take less time than searching for a buyer who can afford to pay for the business in cash.

Your Documents

You’ll also have control over the timeline of the sale based on how well you prepare your documents. When you sell a business, you will need to give your broker and buyer information on the business’s finances.

Documents should also cover any lease for the store or office space and a list of utilities. You should also prepare a document that covers the operating procedures and prepare to hand over the social media accounts.

The more you can prepare these documents, the less time you’ll have to spend on them when a buyer expresses interest. Then, you may be able to move on with that sale.

Asking Price

You may also want to get a business valuation before you even list your business. Then, you’ll be able to list your business for a reasonable selling price to help attract more buyers.

If you list your business for too much, you may put off people who would otherwise want to purchase it. On the other hand, if the list price is too low, people may wonder what is wrong with your business.

When you sell a business, you may need to negotiate on the selling price. But having a ballpark price to list can make a huge difference in how quickly you get an offer.

Location

You should also consider where in St. Louis your business is. For example, if you have a coffee shop or bar, it might sell faster if it’s near Washington University or UMSL.

On the other hand, a business with an office space may sell better if it’s downtown. Think about where you might want to operate the type of business you’re selling.

Then, you can think like a buyer, and you can understand why your business may not sell quickly. If that’s the case, you can work on marketing the sale to get offers.

How Will You Sell a Business?

If you want to sell a business, you may wonder how long it will take. Sadly, you can’t always predict how long it will take to close on the sale.

But you can think about a few factors to help narrow the timeline. Then, you can be sure to list and promote your business so that it can get an offer in no time.

Do you want to sell your business now? Register as a seller and list your business today.

Selling Your Business For The Best Price

Selling your business? You’re not alone. Over 10,000 businesses are sold every year, and that number is only rising! Selling your business can be stressful, and finding the right price to sell it for is even worse.

Luckily, with the right tools, you can sell your business quickly and for the right price. Let’s talk about that.

How To Sell Your Business For The Best Price: Create A Checklist

Having a “sell your business checklist” should be your first priority. You basically want to crunch the numbers, look for hidden factors that can increase your sale, and determine how you’re going to sell it. 

Consider All Factors

There are so many moving parts in a business, and there’s no one-size-fits-all way to determine what makes a company valuable. Brand loyalty, ad success, business location, scale, employee satisfaction, employee efficiency, the company’s assets, and its liabilities. Those are a small few.

Do the math and trying to value a business is tricky but it’s important to determine your selling price. Try to consider any unique factors to your business as well.

Determine Your Minimum And Ideal Price

Once you have a checklist and you’ve considered all the factors that should go into your price, you should have an ideal price tag as well as a minimum that you’ll accept. To create an example, we’ll say that after you’ve determined your business’ assets, liabilities, and prospects, you think that the ideal selling price would be close to $300,000.

If that’s the case, maybe you’re getting close to retirement, you have your social security coming to you along with your retirement account, and you’re looking to get the business off your hands so you can get to what you want to do. You don’t want to involve yourself for 2 or 3 more years just to get that extra bit out for your ideal price.

In that case, your absolute, bare minimum with no wiggle room at all could be something like $200,000. This makes sure that you walk away with enough to keep yourself going, maybe invest it into something else like a rental property, clear all your debts, and you’re good to go!

Now, you want to avoid that bare minimum as much as possible, there’s no doubt about it. $100,000 is a big difference, and you earned that money by running a successful business all this time. So, in the event someone offers you close to that low range, you let them know your bare minimum is something like $275,000! Keep your low figure in your head.

Figure Out Your Options For Buyers

You can take out ads in the newspaper or post “for sale” signs at your location. You can also sell your business online by posting them to business sale websites. There’s a lot more you can do, but the most important thing is to maximize the number of potential buyers you can find, as this will ultimately get you the best price.

Once You Have A Buyer, Make An Offer!

They may make the first offer. It’s your job to counter it if you have your prices in mind. Sticking with the $200,000 to $300,000 example, let’s say they offer you $225,000 for your business in cash. You might be happy with that but now you’re guaranteed a minimum payout of that. Keep the offer on the table at all costs.

If this event pops up, do everything you can to avoid burning that bridge. However, you can still negotiate. You can say: “You know, I ran through the numbers, this business has all of these great amenities to offer, we already have great employees and management, and our customers are very loyal. I definitely think this business is worth $320,000.”

You’re going high, sure. That leaves the space in the middle wide open to meet. While that’s a good opener for a negotiation to begin, it doesn’t mean it even has a shot at working. As we said, don’t burn the bridge. You want anything that’s above your minimum to stay on the table.

If they aren’t budging on a dime, say to them that you’re going to keep their information and that you’ll update them as soon as possible. If you get a better offer, great. If you don’t, you’re still ahead of your minimum.

What If I Can’t Sell Above My Minimum?

If you find yourself in a situation where you think you aren’t going to get a fair deal, have your business evaluated and let any potential buyers know exactly what your company is worth. 

From there, you have a firm figure that you can use to your advantage along with any other selling points you have in your business. Think of it as if you’re selling your home. “The house was valued at $300,000 on Zillow, but it comes with a pool, central air, and all of these amenities not taken into account.”  

What If I Can’t Find A Buyer?

If you’re expecting to put your business on sale on Craigslist and get a bite the next day, you’re in for a surprise. If you’ve exhausted everything you can think of and aren’t having any luck, it’s time to call in the professionals. Hiring a business broker to sell your business is like hiring a realtor to sell your house. It may cost a fee in the end but it’ll likely make you more money and do it in half the time!

Get The Best Bang For Your Buck!

If you’re looking to sell your business, you don’t have to do it alone. Hiring a broker will create more interest among potential buyers, sell the business quicker, and ultimately put more money in your pocket. If you’re interested, be sure to check out our seller’s tutorial to learn more!

Why Use a Business Broker to Sell a Small Business?

According to experts, up to 90% of people fail to sell their businesses. Many business owners often ask themselves, “How to sell my business?” They end up debating whether to do this endeavor on their own or to use a broker.

People sell their businesses for multiple reasons, such as losing profit, wanting to do something else, wanting more time to themselves, or other reasons that aren’t listed. If you fail to sell your business, you may be stuck with debt or something you don’t want. It’s a challenging process, which is why using a broker plays a crucial role; continue reading to learn why you should get one.

Pricing

A knowledgeable business broker can assist you in obtaining the highest possible price. They know the market price structure and can provide important insight into how to price a small business.

If you overprice your business, the majority of prospective buyers will never ask about it. If you undervalue your business, you will not get what it is worth.

Save Time

A competent broker will free up time for you to operate your business and enjoy your personal life. It’s advantageous to have an expert on your side.

Apart from operating your small business, you have a lot of other responsibilities. Why not delegate the hard work to a business broker while you enjoy your time away from your company?

Confidentiality

A reputable business broker would ensure that a non-disclosure agreement or NDA is completed before disclosing anything about your company or even knowing its name. They may assist in explaining why a potential buyer will only get a limited amount of information before making an offer.

A seasoned business broker will weed out bidders who are just seeking information. They will spend time educating genuine buyers about the value of the business.

High-Quality Resources

Professional business brokers have access to resources and industry experts. They would know which SBA banks are lending due to their expertise.

They are acquainted with knowledgeable lawyers that can assist in crafting contracts or ending the sale of a business. They also offer a list of excellent accountants that are familiar with business finances.

Negotiation

Why waste time arguing back and forth when an expert can represent you to get your desired price. By using a business broker, you can remove the worry and personal aspects of the situation.

Marketing

A competent business broker will spend time developing a concise and effective business review (CBR or CIM) that summarizes all of your company’s critical information. A well-crafted presentation will assist the buyer in understanding the advantages of acquisition.

They’ll be able to provide an excellent overview with their acquisition advisers. A strong CBR is an effective instrument for assisting in the sale of your business.

Supportive Financial Representatives

A business broker can collaborate with you or your accountant to explain and clarify your company’s financial situation. This is often referred to as normalizing financial statements, and when presented properly, can help potential buyers understanding your business’s actual financial performance.

Tools

An expert broker will invest in and have access to various tools to help sell your business. They will have access to forms, databases of potential buyers, excellent websites, and much more. Before choosing a broker for the job, it’s advisable to ask them about the tools and techniques they will use to sell your business.

Brokers may use their years of expertise to look around corners and predict possible transaction difficulties in advance. They are intimately acquainted with each stage of the company’s selling process and will offer valuable guidance.

Sell Your Business Checklist: What to Prepare With Your Broker?

Approximately 20%-30% of small businesses listed for sale are successfully sold. In order to be better prepared, here are some items that are required to sell your business:

Required Records & Important Information Before Going To Market!

Prepare the following things before placing the company on the market:

• Three years worth of federal tax returns
• Three years worth of profit and loss statement and a balance sheet
• Three years worth of monthly bank statements

Ensure that you are aware of the proper yearly adjusted net income (cash flow, SDC) for the past three years. Serious buyers will want to know this information early on in the purchasing process, as well as how you obtained it from your tax returns and financial statements.

Obtains a Third-Party Business Valuation

Obtaining a competent company appraisal/valuation from a third party is essential for the selling process. 70% of all small businesses never sell because of the excessive asking price or poor deal structure.

The third-party valuation will be used by a variety of people throughout the selling process:

• Potential business buyers
• Lenders/financing companies for the buyer
• Other advisors/parties to the transaction

Prepare Your Team of Advisors, Attorney, and Accountants

A critical component of being prepared to sell a small business is having a reliable team of experts. This is not the time for your advisers to be on vacation. Make sure you have lined up expert advisers for the length of your transaction.

Database of All Potential Buyers

Maintain a folder or online database of all contacts, notes, and documentation. You want to ensure that you have backup purchasers if your initial one pulls out during the selling process. Maintain all escrow information, purchase agreements, signed non-disclosure papers, contact information for CPAs, attorneys, and other relevant information in this folder throughout the selling process.

Create a Business Profile

Buyers will need a great deal of information about the company being sold. Rather than having to describe the company to many buyers, create a one-page description of the business.

Here is the following information that should be in your one-page description:

• Business’s history
• The date it was founded
• Number of employees
• Significant characteristics
• Recommendation and strategies to run the business
• Geographic location
• Competition
• The reason for selling
• Amount of training provided following the sale

Non-Disclosure Agreements

Before disclosing any information, have all prospective buyers sign and date a Non-Disclosure/Confidentiality Agreement. Let them know the critical nature of maintaining the confidentiality of the company’s transaction and the legal consequences of failing to do so.

Gain Maximum Exposure

The most critical factor in this process is to ensure that large numbers of qualified buyers are aware that the business is for sale. You should expect to invest between $400 and $1,000 in advertising and marketing to reach an adequate amount of buyers.

Sell Your Business Tips: Finding a Reliable Broker

Many states require a broker to be a licensed real estate agent to sell their business. You can verify if an agent is properly licensed by doing a check on your state’s database. You should also make sure that the expert you choose has the experience and is sensitive to your requirements.

Finding a reliable broker can be challenging, but we are here to help. Contact Fusion Business Services to help sell your business today.