Summary: 20 reasons why a seller should use a competent business broker -intermediary.
The Reasons
1. Maintains confidentiality and serves as a "buffer"
2. Knows exactly what information to compile
3. Prepare a comprehensive Business Profile, Sales Memorandum or Prospectus. This will substantially limit the seller\''s time in meeting with numerous buyers and answering the same questions over and over again
4. To properly recast financial statements and ensure appropriate adjustments for discretionary, one-time, extraordinary and similar expenses to demonstrate "true earning capacity"
5. Can expertly value the business and document/justify same
6. To identify and define business intangibles, including goodwill
7. Guide seller how to effectively maximize the valuation of the business
8. Structure the transaction so as to minimize tax consequences
9. Since a buyer will typically only pay an amount based on the historical performance of the business, it is important for the broker to "sell" the potential or "future" of the business, particularly when there is limited or no earnings
10. A qualified business broker will be familiar with the "business opportunities" marketplace and can save the seller time and expense navigating through it
11. Avail the seller of a many marketing strategies and advertising avenues
12. Can review the seller\''s business assets to determine if the business can qualify for third-party (SBA) financing and if not, coordinate other financing options
13. Since most business brokers often represent buyers as well, they can Immediately introduce pre-qualified buyers (see: Quantum Buyer Program) based on a database of prospects
14. Maintains affiliations with competent professionals in the business broker arena and can enable co-brokering and/or lead generation
15. Acts objectively and provides negotiating skills often eliminating the emotional or subjective component which often "kills" deals
16. Serves as an intermediary by inserting space between the parties allowing them to exercise reasonable judgment and make sound decisions
17. Should bring organization and structure to a process which has many steps
18. Prepares transactional documents which are often substantial
19. Coordinates and facilitates due diligence, escrow and other parties involved in the transaction, including the landlord, accountants, tax attorney(s), transaction attorney(s), insurance carriers and agents, lenders, etc.
20. And most of all enable the seller to remain focused in running the business and preserving the asset being sold!
