There are a lot of variables that impact the final price of a business. Most business owners will want, or at least hope to get, a good return for their years of hard work and investment in their business when they sell. Unfortunately, this usually depends on the state of the business when they decide to sell. Thankfully, there are some things you can do to improve your business’s valuation before you sell in Adelaide.
What is a business broker?
A business broker is a third party who mediates between an individual selling a business and the person buying it. Generally, their services encompass the entire sales process of a business, including business valuations, business advisory, mergers and acquisitions, and the transfer of any assets.
What are the pros of hiring a business broker in Adelaide?
A common perspective regarding hiring a business broker is that they are there to do all the paperwork around your business sale. While this is only partially true, the paperwork is only one beneficial aspect of hiring a business broker. Here are some of the pros of engaging with a business broker:
Specialised Knowledge
One of the reasons we believe to be most prominent when hiring a business broker is their experience. Qualified business brokers study to hone their skills regarding selling a business. They make an effort to stay up to date with the latest economic trends and what businesses demand and how they need to be presented to optimise their sale value. Having a broker in your corner during the sale of your business would be invaluable.
Access to their network
Another benefit of brokers is that those who have been in the game for a while with a good reputation usually have a network of other brokers and investors to whom they can market their business. This could lead to you getting a faster sale and a sale with the right buyer for your business.
A more accurate valuation
Setting the right price for your business will impact the sale significantly. If you set a price that’s too high for your business, it could be on the market for years. Likewise, if you set a price too low, you could shoot yourself in the foot. As we said above, brokers have a keen eye for all things business. Some business brokers are certified to do a business valuation for you, too, offering you an unbiased valuation of your business’s market value and valuable insights into areas that you may need to improve to increase it.
Skilled negotiators
Negotiations are an important part of a business sale, but they can also be a challenging part. Some business owners have a sentimental attachment to certain aspects of the business, which could be a hindrance in the negotiation process. However, brokers look at things neutrally and factor in what would be the most profitable decision for the seller and buyer, using their negotiation skills to come to a fair, favourable settlement for both parties.
Time-based incentives
This is another benefit that works in your favour. Usually, when a broker engages in a contract with a business, they structure their fee around the earning commission on the sale of a business. In Australia, this is around 5% to 10% of the total sale price of the company. This means that their potential to earn is directly linked to their ability to sell your business for a reasonable price and in a timely manner. This aligns their incentives with yours.
Hiring a broker
In general, hiring a business broker should help you sell your business and get a decent price. But, like with most things, some people are better than others, so you want to hire the right broker. Here is a helpful page from Benchmark Business Brokers in Adelaide where you can contact amazing business brokers that have been around the block and know each industry well enough to connect you to the right people and help you get a good ROI on your business.
Final thoughts
Whether you’re selling and need an exit strategy or you’re looking to expand your business by acquiring another, hiring the right broker can be your step to achieving your goal. Consider the benefits of hiring a broker above and how they can help you maximise your business’s sale value.
