June 2nd, 2010
Many people choose their business brokers by simply picking out the first choice from the yellow pages or asking around. They do not do their homework or paying much attention to credentials. If you want to sell or buy a business, choosing the right business broker is probably the most important decision you will make.
A business broker is a firm or a person who acts as a liaison between sellers and buyers. Business brokers are also known as business intermediaries because they assist suppliers and procurers in the buying/selling process. Typically, their activities include providing a safe interface for communication between buyer and seller, estimating the value of a business, advertisement activities, managing initial interviews and discussions between the buyer and seller and facilitating the progress of the deal.
As you can see, business brokers help in the selling and buying of business using their special knowledge, resources and contacts. Thus, they can greatly mitigate the risks involved in the buying and selling of a business or service. However, it is important to remember that all business brokers are not equal. Therefore, you need to exercise some caution while selecting business brokers.
Tips to select business brokers:
Ø Use a brokerage firm that has been in the business for more than three years, at the very least. Remember more hands-on experience means more resources and greater reliability.
Ø Excellent business brokers have loads of exposure. They will have experience in a number of fields. They will also put up advertisements and will be actively involved in the business.
Ø If you are in a specialized industry, select business brokers most familiar with your industry. That way, they will be able to evaluate the business, determine a good price and help you locate potential buyers quickly. This makes it easy for you to do business.
Ø Professional business brokers will have an action plan ready to position your business in case you are selling. They will also be in a position to revise prices in case they feel the need to produce a faster sale or in case they feel the market warrants a higher price.
Though the right kind of business broker is vital to the success of your venture, business brokers, in the traditional sense, are not absolutely essential to a business. You can find effective alternate solutions in online directories that facilitate communication and collaboration between business sectors. These trade portals often act as a one-stop shop where interested businesspersons can easily get trade leads, information regarding partnerships, franchises, businesses for sale, potential products and services. In case you are interested in selling your services or products, or want to put up your business for sale, these portals give you all the tools you need to advertise your services, get in touch with prospective clients or put up an extensive, search engine friendly product catalog. These online directories work much like traditional business brokers , and interested parties can enjoy all the facilities offered simply by becoming a member.
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