26 Mar Around the Web: A Week in Summary
A recent blog post from BusinessBroker.net entitled “How A Business Broker Can Help You” discusses the important role a business broker has when it comes to buying a business and how they can help you.
It is important to work with an experienced business broker that you can relate to and that you feel comfortable with. A broker can help you find listings that appeal to you and fit your needs that you might not have found on your own.
There are many big and small steps in the process of buying a business and working with a business broker can help you through these steps to make it easier and more manageable. Some, if not most, brokers have a real estate license so they can broker property transactions and assist with leases.
Some other processes a broker may help you through include answering questions about provided information on businesses presented in a marketing packet, requesting additional information from the seller, scheduling appointments to meet with the seller, making a written offer, etc.
A recent article from Forbes entitled “Thinking About Selling Your Business? Beware Of These Five Deal Killers” lists key actions to be aware of when selling your business that may kill the deal you’re working on and how to avoid this. A mistake could not only kill the deal but it also may significantly hurt the value of your business as well as your chances of selling. Keep these five deal killers in mind when selling your business:
- Telling Your Employees Before The sale – A key here is to not tell any staff members until the deal is done and signed. You don’t want the news spreading and have employees concerned, unfocused and even quitting.
- Allowing The Buyer to Work In the Business Prior to Closing – Involving the buyer in the business operations before the deal is done has the potential to overwhelm them and cause them to feel they are not prepared to take over.
- Thinking You Can Handle The Transaction On Your Own – Whether it’s a business broker, attorney, or CPA, having an experience professional to help and advise you is always a good idea.
- Telling Your Suppliers Or Vendors Before You Close – You want to have clauses and contracts in place to address terms with your suppliers for the transaction months, if not years, before the closing. But don’t tell them why.
- Not Being Prepared To Defend Your Valuation And Not Having Clean Due Diligence Records – You want to make sure all your financials and record keeping are in place and organized. The more that everything is out in the open and organized, the easier it is to prove the value of your business.
A recent article from Inc. entitled “How to Sell Your Business to a Competitor and Not Get Burned” looks at how to sell to a potential strategic buyer in your market while protecting yourself in the process. The key here is to gradually release information and protect yourself using the following practices:
- Put agreements in place to protect the business – Have the potential buyer sign a non-disclosure agreement and a non-solicitation agreement.
- Disclose Information Gradually – Even if you have agreements in place, you don’t want to share everything about your business right away. Some information you will have to give right away like financials but try to keep things like customer names and critical information private for a while.
- Trust Your Instincts – Once a price is agreed upon, the reality is you will have to release all information about the business. By this point you should have spent enough time with the buyer to determine if you can trust them or not. If you don’t, then stop the deal.