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Broker Minnesota

The Importance of a Broker

One of the questions many business advisors run into is, “Why do I need to use a business broker or an investment banker to sell my business?”

Their thinking is that they know all the players in the industry and will market the business themselves.  Their accountant will handle the financial statements; their attorney will handle legal matters, so why not keep the Exit Strategy simple?  Most business sales are not that simple.  I’ve seen many deals over the years that had unforeseen complications that needed an experienced hand to find the solution that was acceptable to both the buyer and seller.

Good intermediaries can add value in almost every phase of the sales process, especially in planning your Exit Strategy.

A professional business broker or investment banker will help you decide on the right timing for selling your business and will handle presale planning. He or she will manage the day-to-day aspects of the sale process, including an overall marketing plan as part of your Exit Strategy.  A business broker or investment banker will identify potential acquisition candidates, qualify them, and supply them with information on the company. In the early stages of negotiation, he/she will negotiate the basic terms of the deal. A professional business broker or investment banker will also coordinate with your other advisors, as appropriate. And in the latter stages of selling your business, he/she will manage the sales process – a full-time endeavor. 

Confidentiality is of utmost importance in marketing your business.

Problems can arise when customers, suppliers, or employees become aware that the business is for sale.  When sellers represent themselves, there is a much greater risk that this will happen.  A professional business broker or investment banker offers maximum exposure to potential buyers while maintaining the greatest degree of confidentiality for the seller.  In addition, retaining a business broker or investment banker allows you to focus on managing the business, rather than on the details of the sales process. I have seen numerous situations where the seller allowed the business to falter while trying to manage the sale. In situations like this, the buyer often will try to negotiate a price reduction due to poor performance in the months prior to closing.

In these instances, retaining a professional business broker or investment banker early on in the process of selling your business can turn out to be a valuable investment in maximizing your return on the sale of your business.  The first time you try anything, you’re apt to make a mistake.  Selling your business is most likely a one-time affair, so any mistakes you make may last a lifetime.  Depending on the size is the business you plan to sell, please use a business broker or an investment banker – you won’t regret it.

KeyeStrategies helps you find your Business Broker.

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Julie Keyes
Julie Keyes

Founder & Owner at KeyeStrategies, LLC

Julie is a Certified Exit Planning Adviser and Value Growth Advisor with 30+ years of experience. She works with business owners who seek to understand and maximize their exit and critical transition options.