Business Blogger » Blog Archive » How Business Brokers Can Make Your Life Easier When Buying a Business
June 16, 2010
Business brokers can certainly make life simpler for a person interested in buying a business. The process to buy a business has some challenges and working with professional business brokers can certainly bring some clarity to the process. This article summarizes some of the benefits that a business broker can bring to a business buyer. Find a business to buy This seems obvious at first but it’s vital to remember that not all businesses are marketed the same way. Most of the time, a business sale is confidential in order to protect the interests of the seller so business brokers must be quite careful in how they advertise a business for sale. That being said, if you are interested in buying a business please be prepared for a thorough search. Finding a excellent business that is right for you is sometimes simpler said than done. Talk to reputable business brokers and let them know what you are looking for. Be as specific as possible. Have an investment level in mind, an industry you are interested (and qualified) in and a geographic area as well. This will help the business broker narrow his or her search to help you find the right venture to buy. Facilitate the negotiations Buying a business requires a degree of sensitivity with respect to the human emotions involved. Oftentimes, a business seller and buyer can clash due to flared emotions or perceived slights and a deal can unnecessarily fall apart. Professional business brokers keep the lines of communication open and help deals overcome the ‘speed bumps’ that invariably come up from time to time. Manage the due diligence process Buying a business requires a high level of due diligence to ensure that the business buyer is comfortable with what he or she is purchasing and that the facts, as they pertain to the business sale, check out. Business brokers help in managing this critical process by ensuring that information flows efficiently both ways, proper information is provided and that the appropriate professionals have the information they need in order to fulfill their roles. Buying a business requires risks to be mitigated – due diligence is the process where much of this occurs. Acclimatize buyers to the local market Sometimes, business buyers end up buying a business in an area where they are newcomers (or perhaps even new immigrants to Ontario or Canada). Business brokers can play a role in familiarizing the city or area the business operates in to prospective buyers. For instance, many business buyers are coming from the city of Toronto and are inquiring about relocating to the outskirts of the city. Buying a business west of the city (for instance, in Mississauga, Oakville, Burlington, Hamilton or Niagara Falls) has become a well loved option for people. A professional Business broker can give these investors a sense of the economic landscape, business culture and so on. Give potential business buyers a sense of what a new industry might be like Many times, people buy a business in an industry where they have minimal or no experience and are forced to make a ‘leap of faith’ and take a chance. For instance, the franchise quick food business is full of business owners with minimal relevant business experience. Likewise for a myriad of industries where new business buyers are completely new to the business (example – convenience stores, gas stations, car washes, printing shops, flower shops, restaurants, and so on). The point is that people do buy businesses where they don’t necessarily have a background in them. For this reason, an experienced business broker can help a potential buyer by giving them a sense of what the business required in order to be successful. Perhaps even a ‘reality check’. Buying a business does require a bit of a leap of faith but mitigating that as much as possible by relying on the experience and background of professionals with experience is a prudent measure.
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