Wednesday, 12 October 2011 20:29

Selling or Buying a Business?--Business Brokers Add Value to the Process

Written by  Fernando Simo
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As we define the purpose of a Business Broker, we simplify it by stating that we:
1.      Bring sellers and buyers of businesses together.
2.      Understand sellers’ financial requirements and, therefore, structure a sale to achieve those requirements.
3.      Assist buyers and sellers in completing transactions.
4.      Add value by streamlining the business process.
Although (1) and (2) above are important to the process, I strongly believe that we add more value in assisting buyers and sellers in “completing the transactions” and “streamlining the business process.” The majority of buyers (and sellers) come to us with little to no experience in what it takes to buy or sell a business. Because of that lack of experience, we try to help them understand:
1.      Their purchase: in some cases, we bring them back to reality with recommendations as to what they SHOULD buy given existing resources and skill levels.
2.      Valuation: we may be simplistic in this process, because valuation is not a science, it is an art.   However, we get our point across in very simple terms and/or comparable presentations.
3.      Simple Immigration requirements: although we are not experts, we can point them in the right direction and explain simple concepts and benefits associated with VISA requirements.
4.      The Legalities of the transaction: we normally prepare and explain Purchase Agreements to both sellers and buyers. However, it is their responsibility to ensure that the agreement meets with their—and their lawyers—approval. 
5.      The Due Diligence Process: we are the managers of this process. We collect all relevant documentation and deal directly with lawyers, CPA’s, landlords and others in helping buyers determine the viability of their business proposition-- Perhaps, the key to completing transactions.
6.      Lease Assignment: we typically help throughout the entire process of transferring a lease or preparing a new one by working closely with landlords.
7.      Closing of a business: we explain to both sellers and buyers the documents they will need to sign at closing. This normally avoids misunderstanding and “dead deals” at the closing table.
Therefore, in reality, the broker “adds value” by being the voice of both seller and buyer throughout the transaction process. If you want peace of mind while either selling/buying a business, work with a Business Broker!
 
Last modified on Wednesday, 12 October 2011 20:39

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