The Dangers of Selling Your Business Without a Broker

Selling a business is a complex and time-consuming process that requires careful planning and execution. Many business owners wonder, “Do I need a business broker to sell my business?” While it is possible to sell a business without the assistance of a broker, there are several advantages to hiring a professional to help with the process.

Should You Hire a Business Broker?

A business broker will assist with finding and assisting buyers in purchasing a deal. They also help buyers establish all of the professionals needed to help a buyer structure a deal together. Often when business owners try to determine whether or not they should hire a broker, they only look at it from the seller’s standpoint.

However, they typically do not consider that the buyers also need assistance. If a business owner is experienced in not only selling businesses but marketing their business confidentially and then assisting buyers with all the aspects of buying a business, then they might be able to sell their business without a broker.

If a business owner is selling a large volume business with high-value customers and employees where confidentiality is critical and they are not sure where to start, a business broker can be beneficial and remove many of these burdens from the business seller.

Is it Wise to Sell Your Business Yourself?

Much of this will depend on the complexity of the business and the time and experience the owner has in selling the business. If it is a simple deal similar to deals the business owner has sold before, it could make sense not to use a broker, especially if they have time available. If keeping a sale confidential is unimportant, hiring a broker to navigate the sale process may not make as much sense.

If you’re short on time or don’t have a lot of experience selling businesses, and the business sale is complicated, and you have to keep the sale confidential, think about hiring a broker. Brokers have a network of potential buyers and can help you get the best possible price for your business.

Many business brokers have done deals like this before, and they know how to market to buyers, package information, and determine if a buyer can obtain funding to afford the deal. An effective broker can keep all of these efforts confidential.

How to Sell Your Business Yourself

To sell the business yourself, you have to gather all the materials that buyers want to see and have those materials ready. This includes financial records, materials on the business, an inventory list, and an equipment list.

You have to market the business confidentially because you do not want your employees to know, your competitors to know, or your customers to know. Then you must make sure the buyers have their funding in place. You will likely have to help them get the funding if they do not. It is also recommended that buyers hire attorneys and accountants to help with any due diligence questions that a buyer or seller may have.

When all the questions have been answered, and due diligence looks great, a bill of sale can be written up and signed, and money can exchange hands. Often, an attorney handles these aspects, but it is not required.

Benefits of Using a Business Broker

1. Access to Expertise: Experienced business brokers can help prepare a seller for how the process is likely to go, who the business buyers are likely to be, and what the buyers will likely ask for, and help business owners strategically price a business. They can provide a business valuation based on market research and similar recently sold businesses.
2. More extensive Network: Business brokers often have a network of potential buyers and forums where they can market and advertise a business. They have established strategies that work and those that do not work. They can find interested buyers more quickly than a business owner could.
3. More Time to Run the Business: Business brokers spend a great deal of time putting packages together that market and go over the business. They also spend time answering questions and inquiries from prospective buyers and the professionals working with the buyers and sellers. These are all tasks that the business owner would have to handle themselves without a broker around.
4. Negotiations: Business brokers can negotiate on your behalf. They have experience negotiating with buyers and can help you get the best possible price for your business. They can also handle the due diligence process, ensuring that interested buyers are qualified and have the necessary financial and personal statements to support the purchase.
5. Keeping The Sale Confidential: Business brokers are trained in marketing businesses without disclosing names and whereabouts. This is important to help business owners maintain the sanctity of their business. Business owners often do not want their employees, customers, or competitors to know they are selling. Business brokers can handle inquiries discreetly and ensure a non-disclosure agreement is in place.

Disadvantages of Selling a Business on Your Own

Selling a business without a broker can be challenging for many business owners. One of the main disadvantages is the lack of access to business buyer networks, information on previous sales, and marketing networks. It can be hard to know if you are getting the full value for your business and finding the right buyers. Most business owners do not know where to start when marketing a business for sale, and business brokers can set everything up and keep everything organized.

Another disadvantage is the loss of confidentiality. Keeping a potential sale confidential is difficult when an owner does it directly. A business broker can handle a much greater inflow of inquiries and maintain confidentiality.

Hiring a business broker can be a wise decision for many business owners. A good business broker can provide small business owners with access to expertise, a more extensive network of potential buyers, more time to run the business, assistance with negotiations, and help keep the sale confidential. Whether you are a small business owner or have a larger business, a business broker can help you navigate the complex business selling process and ensure a successful sale.

Why Choose Crowne Atlantic as Your Business Brokers in Orlando and Central Florida

At Crowne Atlantic, we understand the complexities and challenges of selling a business. Founded in 2004, we are a family-owned business with a mission to match the right sellers with the right buyers and close deals.

Our founders are seasoned business and commercial real estate brokers with years of experience. We have sold hundreds of companies in almost every primary industry, including manufacturing, medical, wholesale, distribution, retail, service, restaurants, franchises, chains, and professional businesses. We work with companies sold with and without property, with values ranging from as much as $20M to as little as $100,000.

As business brokers who are also business owners, we have a unique understanding of day-to-day operations and what it takes to run a successful company. Every broker at our firm has owned and run a business, giving us an advantage when helping someone purchase a business.

We enjoy being a part of operations and working with entrepreneurs to navigate the most successful path forward. When working with sellers, we efficiently review current and past performance and discuss the future potential that the new owner will incur.

We have been in Florida for over 47 years, bringing geographical and demographic knowledge, the best locations for various industries, a diverse and deep network of contacts, trend awareness about current and future markets, and an 80% higher rate of success than brokers not experienced in the industry.

We take confidentiality in the business sale process very seriously, requiring each buyer to sign a confidentiality agreement and buyer profile before discussing any details about a business. We also establish the buyer’s financial qualifications when looking at a business. During the closing process, we arrange closings only with attorneys whom we have worked with in the past and who have many years of experience handling business closings.

At Crowne Atlantic, we are passionate about helping people buy and sell businesses in Florida. If you’re ready to buy or sell your business in Orlando and Central Florida, call us at 407-478-4101. We will work hard to make the transaction as easy and successful as possible.

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