• Luke Middnedorf

What is a Business Broker, and What Do They Do?

Updated: Jun 7

What is a Business Broker, and What Do They Do?

A business broker is a professional who helps business owners sell their businesses. They can provide valuable assistance during the entire process, from helping to determine a fair asking price to finding potential buyers. Here we will discuss what business brokers do and how they can help you sell your business quickly and efficiently.

Understanding the value of your business

One of the most important things a business broker can do is help you determine a fair asking price for your business. They will consider factors such as the current market value of similar businesses, your financials, and any outstanding debt that must be paid off. Then, based on the information that they gather, they will provide you with a Broker Opinion of Value.

With this information, they can help you develop a realistic asking price that will attract serious buyers.

Leveraging their networks and marketing experience

Business brokers typically have a vast network of contacts in the business world. They can use this network to help you find potential buyers for your business. In addition, they can take over the bulk of the efforts of marketing your business and make it more attractive to potential buyers. They will help you develop a confidential business review (CBR) which is released to serious prospective buyers. The CBR is a document that outlines your business's key financial metrics and marketability.

Controlling the evaluation process

A good broker will help bring in a lot of interested buyers. You will need their help to qualify the buyers so that you can focus on talking to the buyers with the right experience and financial backing to acquire your business.

Managing the negotiations

Negotiating the sale of a business can be a complicated and emotional process. A business broker will help manage the negotiations and keep them on track. It requires multiple interactions with the buyer and includes many different elements, including the asking price, transition period, asset valuation, and accounts receivable turnover, to name a few.

Driving the close of the deal

A good broker has a strong attorney to help compile the closing documents, manage escrow, and finalize the sale. Your broker should also ensure that all the paperwork is in order and that you understand everything before signing.

Interested in selling your Sacramento based business?

Our business advisors at Sacramento Business Brokers have the experience you need to help you achieve the best business exit. Contact us today for a free consultation.