Definition of a Business Broker | eHow.com

Definition of a Business Broker | eHow.com

By Lanae Carr, eHow Contributing Writer

The Small Business Administration estimates there to be 29.6 million small businesses in the United States. Businesses merge and change ownership daily to maximize profit potential or for simple issues such as the business owner's retirement. A business broker is a valuable asset for business owners, as their job is to facilitate the process.

Function
1. "An experienced business broker can help guide you through the complicated process of selling your business," explains the International Business Brokers Association (IBBA). Business brokers work as a mediator between buyers and sellers to efficiently close the purchase/sale processes. Business owners looking to sell their businesses seek confidentiality, continuity, valuation, marketing and communication with potential buyers from their business brokers.

Valuation
2. Business valuation is a difficult and complex process. Every business is different, with hundreds of variables that have an impact on the value. Business brokers can assess the varied characteristics of your business against a business transaction database that can be used as a reference point for determining value.

Confidentiality
3. Many confuse the sale of a business with the owner "going out of business." For this reason, business owners often choose to keep the sale of their businesses confidential by using a business broker who can promote the sale of their businesses discreetly. Business brokers have the experience to screen and approve buyers prior to revealing your company name and information.

Marketing
4. Numbers alone don't sell your business. A business broker can present your business information in a way that highlights your strongest selling points when pitching to potential buyers. Experienced brokers have worked with buyers from a variety of backgrounds and can promote your business in a way that is influential for the target buyer.

Communication
5. Communication between buyers and sellers, especially those who are inexperienced, require mediation. Business owners have the responsibility of continuing the operation of their business during the sale transaction and usually have little time to spend negotiating back and forth with a potential buyer. "The faster the sale, the lower the risk of employee problems, customer defection and predatory competition," suggests IBBA.

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