Why Choose a Broker?
Larry Veltkamp, PBB
In a perfect world, a Business owner turns 64 ½ years of age, thinks about
enjoying life and spending some of the fruits of his labors.
Simultaneously, a firm in the same industry from a neighboring
state seeks to expand and contacts the potential retiree.
They meet, look over the operation, study the books, shake
hands and the new owner hands the seller a cashiers check
for the purchase price. The seller then turns over the keys
and heads for Hawaii.
In real life, an owner begins thinking about retirement or changing career paths and generally discusses his plans with his legal and tax advisors. Then the questions begin . . .
What is this business worth? Who would buy it? Where is the buyer? How do I find him? How will I sell it without my clients, employees, suppliers, landlord, and bankers finding out? How will I know when I looker is a buyer? How much information do I give out and when? How will I find time to do all that and still keep my business functioning?
Hence the value of the professional business broker.
A professional broker well understands a seller's needs, understands what a buyer will be looking for and will manage the sales proves through its completion.
A professional broker will be able to analyze the market value of the business because the broker makes a living from the transfer of businesses, not from theoretical calculations. The good broker is on the cutting edge of the local market.
A professional broker can intelligently communicate with the accounting people and assist in unraveling the true earnings or "discretionary cash flow" available to a buyer before taxes and debt service. That cash flow combined with fair market of assets is a very necessary ingredient in the asking price and value of a business.
A seasoned broker can act as a screen by not revealing the identity of your business until potential buyers have been pre-qualified for financial capability and necessary business skills.
A professional broker, after screening and securing a non-disclosure agreement, can arrange to present a comprehensive package including a business overview, equipment lists, financial reports, leases, competitive assessments, etc. A showing can be arranged at a time that is convenient to the seller when customers and employees are not present, thus keeping the process confidential.
A professional broker can work hand in hand with attorneys, accountants, landlords and other third parties.
A professional broker has preliminary knowledge of requirements of lenders which buyers must meet. The broker can lead the buyer to such sources.
|
