10 Sep These 4 Strategies Will Help You Sell More Businesses
As a successful business broker, you’ll be used to managing all kind of sales for all types of companies. But how can you move beyond a simple string of person-to-person sales? The trick lies in carefully optimizing your brokering – through strategy.
Every broker who moves beyond the occasional small-scale commission needs a long-term strategy to compete. Here are our quick and easy sales techniques that you can start applying to your work today to streamline your deals and broker more sales.
1. Research and adapt to what the client needs
It’s a safe bet that the clients who are going to purchase a brokered business will probably be pretty similar to the clients offering their business to you for brokering.
It’s worth researching the current concerns, typical budget, prospects, and realistic asking prices for the sector you’re brokering in. Establishing realistic expectations for yourself and your clients is vital to getting those open offers.
It’s also worth considering the exact reason why your clients are selling. Are they selling their business to recoup losses and avoid bankruptcy? Move onto a new business or franchise? Retire? Or to finally cash out on an already successful idea? Is it the result of an estate sale or the breakup of a larger, defunct franchise or group?
Likewise, what exactly are your buyers looking for? Entry into an emerging market? More money from a unique idea they don’t want to mess with? Franchise conversion? Floor space for a different idea in a popular part of town? Asset stripping an organization that can’t be saved or has become obsolete?
A careful and tactful presentation of seller motivation that’s tailored to popular and likely buyer ambitions can greatly boost your final sale price and cut. This will need to vary with every sector and every motivation.
If the owners are ending their run on a high, empathize their great track record, existing assets, and projected future earnings. If it’s a sadder note that you’re striking, underline that the sale of the business is a potential bargain for the buyer and a lifesaving relief for the seller.
Doing your homework will mean that you have an edge over other brokers. You’ll be able to respond better to questions and requests from your client, too.
No matter what business you are looking to sell, from a convenience store to a restaurant, you should be as prepared as possible.
2. Good presentation
Attractive businesses sell faster and for a better price than ones that seem run down and flagging, even if the numbers on the spreadsheet are superb. Encourage your clients to tidy up as best as they can, while putting aside a renovation budget if it’s needed.
Paper representation counts, too. Can you put together a client portfolio of existing successes? If the business has undergone an evaluation, can you obtain solid, positive estimates for growth and net income? Evidence counts for more than vague promises of future success.
3. Be discreet
Business sales and day-to-day trading are frequently jeopardized by the news of a sale leaking into the public domain. Customers, clients, and staff can enter panic mode. Surprise sales are often associated with layoffs, product changes, and the ethos of a business being lost.
While you’ll know that these are often misconceptions, people are sometimes correct in their fears. This is particularly so if the owners are known to be struggling.
All public concerns can end up lowering the value of your brokered property. No-one really wants to pay premium prices for a ship that’s seen to be sinking, regardless of whether it’s actually taking on water.
For these reasons and more it’s not recommended that you inform staff, shareholders, and the public until a sale is finalized on paper and takeover arrangements have been made. Advertising should be kept strictly limited to trade journals and websites.
Of course, you’ll have to balance discretion with actually getting the word out about your sale. You can anonymize the name of the business if need be. The announcement of any resulting job or franchise losses should be handled tactfully and with solemn regret.
4. Promote appropriately
How is your business going to be sold? Typically, there are three main routes to a sale – online marketplace websites, trade publications, and networking.
Ideally, you’ll want to match the region, bank account, and profession of potential buyers. Research what’s being read and make sure you put together a quality listing, pointing out why it’s both financially and professionally profitable to make an offer on your business.
A realistic asset evaluation will help you set an eye-catching opening offer. Trade conferences and meetings can be a great location to advertise without alerting the general public to a sale.
Keep an eye out for any interested local competitors and larger businesses, as well. Many companies will pay top dollar to absorb or fold the successful competition into their operation.
By Bruce Hakutizwi, USA and International Accounts Director for BusinessesForSale.com, the world’s largest online marketplace for buying and selling small and medium size businesses.