Category: Brokerage Services

Common Mistakes Business Owners Make When Selling Their Business

As a business owner, you’ve worked hard to build your company from the ground up. Now, you’re considering selling your business and moving on to your next venture. While this can be an exciting time, it’s important to avoid common mistakes that many business owners make when selling their business. In this blog post, we’ll highlight some of these mistakes and show you how Murphy Business Sales can help you successfully exit your business.

Mistake #1: Failing to Plan Ahead

One of the biggest mistakes business owners make when selling their business is failing to plan ahead. A successful sale requires careful planning and preparation, including organizing your financial records, valuing your business, and identifying potential buyers. Without proper planning, you may find yourself scrambling to gather necessary information, leading to delays and potential complications during the sales process.

Murphy Business Sales can help you develop a comprehensive exit plan that takes into account your personal and financial goals. We have experience working with business owners like you and can guide you through each step of the process, from valuation to finding the right buyer.

Mistake #2: Overvaluing Your Business

Another common mistake business owners make is overvaluing their business. While it’s natural to want to get the highest possible price for your business, setting an unrealistic asking price can deter potential buyers and ultimately result in a failed sale. It’s important to work with an experienced business broker who can help you accurately value your business and set a realistic asking price.

At Murphy Business Sales, we have access to industry-specific valuation tools and can provide you with a comprehensive analysis of your business’s worth. We can also help you understand the market conditions and what buyers are looking for in a business, allowing you to set an asking price that is fair and competitive.

Mistake #3: Neglecting to Prepare Your Business for Sale

Another common mistake business owners make is neglecting to prepare their business for sale. This can include everything from cleaning up your financials to sprucing up your physical space. Neglecting to prepare your business for sale can turn off potential buyers and reduce the overall value of your business.

Murphy Business Sales can help you identify areas where your business can be improved to maximize its value. We have experience working with businesses in a wide range of industries and can provide you with insights and strategies to prepare your business for sale. We can also help you market your business to potential buyers, increasing the likelihood of a successful sale.

In conclusion, selling your business can be a complex process, but by avoiding common mistakes and working with experienced business brokers such as the professionals at Murphy Business Sales you can successfully exit your business and move on to your next venture. Our team of experts can provide you with the guidance, support, and resources you need to achieve your personal and financial goals. Contact us today to learn more about how we can help you sell your business.

Understanding a Balance Sheet

Whether you’re running a successful business or interested in buying one, it’s important to understand the various financial documents that a company produces. These reports help you know what’s going well, what’s going poorly, and whether the company has a healthy long-term outlook.

The balance sheet is a report that helps you look at the big picture of the company. You can see the assets, liabilities, and owner’s equity. These are generally prepared once a quarter or once a year and represent the business’s current financial position.

Here’s what you need to know about each balance sheet category:

Looking at Assets

The first part of the report will tell you what resources the business has. This can help you value the company and know exactly what you’re buying. Or, if you’re an owner, it can give you a good idea of how strong your company is.

You don’t want to look at just the amount of assets but also how high-quality they are. That means, how likely are you to be able to turn that asset into the appropriate amount of cash? Of course, cash on hand is the highest value, and aging account receivables have far less value.

Pay attention to the age and quality of the inventory and how close major assets are to the end of their useful lives. The net value of an item is its initial value minus depreciation, so that’s an important number to note.

Understanding Liabilities

Next, you’ll look at liabilities. These are debts that the business owes to others. You might see accounts payable to specific vendors, loans from the bank, or other liabilities. When you’re buying a business, you may choose to buy only the assets, but the seller may also require you to cover the short-term liabilities like accounts payable.

Any liability that’s due in 12 months or less is a short-term liability. Long-term liabilities include long-term loans, bonds the company issued, or other long-term debt.

Owner’s Equity (Book Value)

The amount left over after you subtract the liabilities from the assets is the owner’s equity, or book value, of the company. This is what belongs to the business owners. Some of the items in this category include invested capital, retained earnings, and the amount of equity drawn out of the company to pay owners.

Theoretically, the book value is what you would get if you liquidate the company rather than sell it. It’s a good bottom-line number so that you know how much you could get back if everything goes poorly.

As a business owner, it’s essential to trim your expenses and keep your book value high. Of course, there might be periods of higher costs, but those should be temporary. Use the balance sheet to understand where you can cut costs and improve your business situation.

Your Balance Sheet Reflects Financial Health

Now that you understand the three parts of the balance sheet, you can see how it reflects the business’s financial health. A company with low cash, older assets, and high liabilities is in a dangerous position.

On the other hand, having substantial cash reserves, newer assets, and low liabilities makes your company more attractive to buyers.

If you’re interested in buying or selling a company, don’t go it alone. There are too many ways you can leave money on the table. Instead, let us help you get the deal that works best for you. Contact us today for more information!

3 Reasons to Buy a Business Instead of Starting Your Own

A lot of people dream of being their own boss. They want to own a company so they can do what they love and make the rules themselves. Entrepreneurs also find it important to be able to serve their customers in the best way possible, unconstrained by others’ rules.

If that’s you, you might think that the best avenue is to start your own business from scratch. However, many entrepreneurs find that buying an existing business makes more sense than starting over.

Inside of a warehouse - buying an established business

Why would you buy a business rather than start your own? Here are three reasons to consider:

1. It’s Easier to Secure Financing

As the saying goes, it takes money to make money, and unless you have a lot of capital to start with, you’ll need financing. Those who found their companies on their own often bootstrap. That means they use their own savings, borrow from family and friends, and keep costs low so they can get started successfully.

Unfortunately, that doesn’t always work, and bootstrapping can limit how quickly you can grow. Getting financing from an outside source is a better choice, but lenders and investors often look for existing customers, cash flow, and signs of success before they’re willing to hand over cash.

When you buy an existing business, you have a structure that’s already working. You have customers, and you’re bringing in revenue from the beginning. That makes it much easier to get financing.

2. You Have an Established Brand

The world is an incredibly noisy place. Americans are exposed to 4,000 to 10,000 ads per day, and most people have a very short attention span. If you’re starting a business from scratch, it won’t be easy to get noticed.

If you buy an existing business, you start with an established brand that already has steady customers. If the company is successful, then advertising is already in place, and local residents have heard of the business and seen the store.

Your job as the owner of an existing business is to amplify the brand and spread your influence, which is much easier than trying to break into the market from scratch.

3. An Established Operations System

Setting up business operations isn’t as easy as putting an “Open” sign in the window. You need to have a reliable, consistent supplier, accounting systems, customer service processes, and other contacts within the industry.

Buying a business that already has a working operation saves you significant time, money, and headaches. Even if you come in wanting to make changes, you have a functional system to start with. That makes it much easier to improve.

Starting from scratch is a lot of trial and error, and unfortunately, the wrong decisions can cause the business to fail. When you buy a company, you can start with the existing processes and make them better.

Is it Time To Buy a Business?

Being an entrepreneur is a big decision, and you shouldn’t make it lightly. Instead, look at all of your options before you move forward.

You might have assumed that starting your own business was the only way forward, but the truth is there are a lot of advantages to buying an existing company. If you’re interested in learning more, contact us today!Inside of a warehouse - buying an established business

Franchise or No Franchise

As an entrepreneur, you have many options when it comes to buying a company. Do you want to choose an established business in a specific area, or would you prefer to be a franchise owner? There are benefits and drawbacks to each one, and a business broker like Murphy Business can help you decide what’s right for your situation. Here are some factors to consider when deciding between a franchise and a stand-alone company.

Do You Prefer Built-In Structure?

Many people who have spent a lot of time as workers in corporate America are itching to get out. They know there are better opportunities out there, and they’re right! They don’t want to build someone else’s dream anymore.

People from corporate America often do very well as franchise owners. The company is already structured for them, and they know exactly what to expect. At the same time, they get the freedom to run their own business and make their own profits.

Even if you haven’t worked as an employee for very long, you might prefer a bit of structure in your business experience as well. That’s where a franchise can help you succeed. If you want a predictable but freeing business experience, a franchise might be perfect for you.

What Is Your Risk Tolerance?

Some people prefer to invest in a franchise because it’s somewhat less risky than starting a new, unproven company. With a franchise, you generally have a recognized brand name, corporate support with marketing, and a clear understanding of your area’s business opportunities.

If you prefer to strike out on your own or buy a stand-alone business, you’ll need a strong stomach for risk. You’ll also want to do a lot of research on the company’s history and the potential for new customers and growth in your area.

In both cases — with a franchise or another business — you can look at sales trends in your area, competitors, and the history of demand for that product or service. A business broker can help you evaluate a variety of opportunities and find what’s right for you.

Do You Want to Be Completely in Charge?

Some people don’t feel like they truly own a business if they cannot make all of the decisions. Being a franchisee gives you many benefits and some freedom, but you still don’t call all the shots. For instance, while you’ll have a protected territory, you will have to follow the company’s guidelines on uniforms, packaging and delivery, and marketing materials. You won’t be able to make any changes without the franchisor’s approval. To some business owners, this will feel uncomfortably restrictive.

For example, if you own restaurant franchise and the company decided to offer all-day breakfast nationwide, your restaurant will have to follow suit. If you didn’t like the decision, you would have to make your concerns known to the company and hope for a change. If you owned a stand-alone restaurant, you are responsible for all decisions. What you offered and when would be completely up to you.

Understanding Franchise Fees

One of the biggest questions in owning a franchise is franchise fees. In most cases, you will pay an initial franchise fee to purchase the franchise. This gives you the right to use the brand name, typically given training and support from the franchisor. Additionally, you will pay a portion of your sales to the franchisor this is considered a royalty payment for the continued use of the brand name and support you will be provided. Before you purchase a franchise, make sure you look at all fees associated with the franchise. Compare that to other business opportunities in your area.

To Franchise or Not to Franchise?

Only you know whether buying a franchise makes sense for you. If you prefer a built-in structure, a protected service area, and corporate assistance with marketing, it may be a great fit. However, you will also have specific rules to follow, franchise fees, and brand responsibilities.

To learn more about what kind of business you should buy, get in touch with us at Murphy Business today. We can talk to you about your needs and share business opportunities that meet your requirements.

What to Expect as a First-Time Business Buyer

If you’re looking to become an entrepreneur, the first decision you have is whether to buy a business or start a new one. There are many advantages to buying a business, including a built-in customer base, operations process, and knowledgeable employees.

However, being a first-time business buyer can be stressful. It’s important to know what to expect and the pitfalls to watch out for along the way.

Here are some things to keep in mind as you buy your first company!

You Won’t Fit Every Business Opportunity

Some people feel that a person with strong business skills should be able to run any company, but that isn’t the case. You don’t want to make a decision based on track record or financials alone. Instead, make sure the business opportunity really fits you.

Do you know the business model? Are you passionate about and familiar with the industry? If not, this company isn’t a good fit for you. For your ideas and innovations to be successful, you must understand the industry and love the work.

It’s Not Good to Go It Alone

You might consider yourself a savvy individual, and you’re probably very smart and have an eye for details. However, you never want to buy a business without help.

There are a lot of pitfalls to watch out for when buying a business. For instance, something that seems too good to be true — in terms of business success or financing — probably is. A business broker can help you ferret out what’s going on behind the scenes.

Don’t let yourself be taken advantage of during a business deal. You’ll find yourself in a terrible financial situation with tons of regret. Instead, work with the right people from the beginning.

There are Several Ways to Value a Business

When you buy a home or car, there’s an accepted way to find a value, and it’s the same for all similar assets. With a business, that’s not the case. However, there are better valuation options to use, depending on the type of business.

For existing businesses that have been around for a while, you might use the earnings approach. Using earnings to determine a value can be done using capitalized earnings or discounted cash flows. However, this method relies on predicting future earnings, which can be difficult.

If you’re buying a business with a lot of capital or assets or hasn’t yet turned a profit, consider the assets approach to valuation. What you do here is take the tangible and intangible asset value and subtract debts and liabilities. With this approach, you look at both the current cash value of assets and the potential return on investment of using them.

The market approach is a final valuation method and may be used together with one of the first two. If similar businesses in the area have sold recently, how much did they sell for? How does that compare with the price you’re being offered now?

Working with a business broker can help you keep these valuation methods straight and use the right one for your industry and situation.

There Are a Variety of Ways to Fund a Business

Just like there are a lot of ways to determine a company’s value, there are a lot of ways to find financing as well.

One of the most common payment arrangements involves using a down payment and then agreeing to pay the seller on a set schedule until the balance is paid off. Make sure the down payment isn’t so large that you struggle to have the capital to run the business afterward.

You can look into traditional or Small Business Administration (SBA) loans as well. Many business buyers find that SBA loans are easier to qualify for and have more favorable terms for entrepreneurs.

Some buyers look into alternatives that can help reduce the purchase price, including issuing stock to employees, assuming business debt, and more. The key is to fully understand the terms of the deal and ensure you aren’t putting yourself in a bad situation.

Murphy Business Can Help You Find Your Dream Company

If you’re ready to purchase a business, you want to find a qualified business broker to help you. Murphy Business is just that. We have many years of experience helping business buyers and sellers, and we know what it takes to close a beneficial deal.

If you’re ready to start the journey of buying a business, contact us today!

Ready to Sell? 3 Steps to Prepare

You’ve spent years building your company, but the day has come. It’s time to sell your business. Whether you’re planning to retire, move to a different industry, or reinvest in a new company, selling your current business can be challenging.

It’s important to find a buyer who is ready and willing to do right by your customers, employees, and suppliers. However, there are also likely hard changes to be made. How can you prepare your company for sale and get the right buyer?

Here are three steps to help you prepare to sell your business:

1. Build Your Revenue

A buyer will look closely at how your business is trending. A growing business is more desirable and will command a higher price than a stagnating or downward-trending company.

Consider creating a new sales initiative for your employees or bumping up your sales staff. Also, make sure that every dollar of income and expenses is recorded accurately in your financial records.

When you have a growing business with impeccable records, your company will become much more attractive to buyers.

2. Reduce Your Influence in the Company

This may be one of the hardest, but most important, ways to prepare for a business sale. You need to reduce your role in the business so that your management team can step forward. If you haven’t created a strong management group, this is a great time to do so.

Selling the business naturally means that you won’t be there to call the shots. Someone else will be taking over. The more you’ve stepped back and let others lead, the easier the transition.

Employees, customers, and suppliers need a go-to contact that isn’t you. Set these reporting structures up now so that when you sell, the process will be seamless.

3. Turn Excess Inventory and Assets to Cash

It’s easy for a company to sit on old inventory well after it should have sold. If you’ve been leading the business for a number of years, there may be a lot of excess inventory in storage.

Generally, a new buyer isn’t going to be interested in paying for old stock, so now is the time to liquidate it and turn it into cash for your company. Get your inventory down to the level it needs to be for normal business operation before you sell.

The same principle applies to business assets. If you have old equipment you’re not using anymore or other assets that are gathering dust, it’s time to sell them. If they don’t have retail value, sell them for scrap or parts or dispose of them.

Just the Beginning

These three steps are essential, but there’s more you need to know. There are actually nine steps we recommend to prepare your business for sale. Get the guide for free now!

Once you’re ready to sell, you need the right brokerage to partner with you and help you find a qualified buyer. Don’t waste your time with people who are just practicing their valuations or “kicking the tires.”

When you work with Murphy Business, we can connect you with serious, highly-qualified buyers who are ready to take action on your company. Ready to get started? Contact us today!

Sell a Company with Murphy Business

At Murphy Business, we’re business sales specialists. If you’re looking to sell a company, you can partner with us to ensure you get the maximum value out of the final deal. Not only will you have access to our experience and expertise, but you’ll also benefit from our extensive connections. Combined, these factors provide you with the assistance you need during every step of the transaction, while also making it simple to sell a company with confidence.

How Our Experts Can Help You Sell a Company

Our business brokers have unique insight into the business market as many of them were once successful business owners themselves. This experience enables them to understand any concerns you’re facing and explain the options you have in a clear and accommodating manner. 

Our personal experience with business ownership and management lends itself well to facilitating business transactions that leave both buyers and sellers satisfied with the ultimate purchase agreement.

buying an established business

Valuation & Marketing

The sales process always begins with a business valuation. This procedure makes it possible to price your business in a fair and accurate manner, ensuring the final sale price reflects the true value of your business.

After we’ve determined how to price your business, we’ll design a plan to market it to potential buyers. We work with a wide range of strategies to promote our clients’ businesses, from advertising in trade publications to targeted marketing and direct mail campaigns. As part of your marketing plan, we’ll also create a comprehensive Offering Portfolio containing all the information buyers need to assess their interest in your business.

We go above and beyond for our clients by promoting their businesses through the national and international networks of our affiliates. This access enables word of your business to reach a more extensive pool of buyers and increases your chances of landing a deal that meets your expectations.

Negotiations & Agreement Finalization

Finding a buyer is just the beginning. Next comes the often complicated process of negotiating with the buyer and creating a deal structure. This can be a tenuous time for both buyers and sellers, as small misunderstandings or miscommunications can lead to the whole deal unraveling. Having a business broker act as a mediator helps prevent these issues from getting in the way of an agreement that is satisfactory to both parties.

You can rely on us to steadily negotiate on your behalf while keeping you in the loop on the terms of sale and ensuring you have the final say on all decisions. With our assistance, you can successfully sell a company while minimizing stress and maintaining perspective, focusing on your future at all times.

Understanding the Scope of Our Services

Our breadth of experience includes business transactions across a wide range of industries, from construction and transportation to lodging and retail. Take a look at just a few of the different types of businesses we currently have listed for sale:

    • Restaurants, cafes, and bakeries. From a cafe that’s been open for over four decades to an award-winning, European-style bakery to a casual Tex-Mex franchise with great visibility, we have a number of businesses for sale in the food service industry.
    • Construction and commercial contracting. An extremely profitable structural concrete contractor, a leading rigging and crane service, and a fabricator of exterior structures are just a few of the exciting companies available through our brokers.
    • Recreation and lodging. We look forward to connecting entrepreneurs with an amazing outdoor entertainment venue with potential for a vineyard. We also have a lakefront resort available for purchase, as well as a fun corporate event business. 

Sell a company with confidence by partnering with Murphy Business. Give us a call today at (888) 561-3243 to connect with a business broker in your local area. 

 

Common Questions Our Business Brokers Can Answer

If you’re a business owner who’s looking to sell your business, you are sure to have lots of questions about what to expect. When it comes to dealing with such a life-altering decision, it’s best to consult a professional business broker who can provide objective advice about taking the appropriate steps for your personal and professional goals.

At Murphy Business, we’re proud to be there for business owners when they need us most. You can count on our brokers to answer all of your questions before you make any tough decisions about selling your business. In addition, we’ll guide you every step of the way during the negotiation process.

Below, you can find some of the most frequently asked questions we receive from business owners. While every situation is different, we hope that this information can help clarify any concerns you have as you embark on the journey of selling your business.

How should I go about selecting a business broker?

When it comes to choosing a broker, interviews are the best way to assess whether or not a particular individual is going to be able to meet your needs. First and foremost, you’ll want to select a broker who is easy to communicate with. This quality is going to be very important throughout the process of selling your business. 

It’s also a good idea to choose a local business broker who has national connections. For example, at Murphy Business, our brokers are experts in their local markets but have extensive access and resources through our international organization. Finally, ensure any broker you work with is willing to provide referrals to professionals who can share their experience with you.

How do business brokers find buyers?

With Murphy Business, finding a serious buyer isn’t a struggle. That’s because we maintain a large network of buyers through our far-reaching organization. Our goal is to find a qualified buyer who shows genuine interest in your business, is prepared to pay market value, and is ready to move quickly toward the final sale. 

Some of the ways we go about doing this include, marketing listings in leading publications and searching via associated industries. Since we maintain national and international affiliations with business brokerage associations, we are able to reach a large pool of buyers and narrow down the interested parties to those who are the best fit for your business.

How long will it take to sell my business?

Every business sale is different, so it’s best to refrain from setting expectations regarding the length of time required to find a buyer and finalize a sale. That being said, the average transaction length is between 6 to 9 months, while more complex sales can take around a year.

There are a number of factors that go into this calculation, from the time it takes to determine the value of the business to the number of buyers available and obstacles associated with acquiring financing. Whether your journey is quick or a little more lengthy, you can rely on us to help you make sound decisions that you’ll be satisfied with well after the ink has dried.

What are the first steps of the selling process?

Selling a business isn’t as simple as posting a few pictures and a quick description online. There’s actually quite a bit of research that must be conducted in order to put your business on the market. First, you’ll need to evaluate your business operations and analyze your financial records. This ensures all of your ducks are in a row and clarifies the different strengths and weaknesses your business presents.  

Through a Business Valuation and Market Analysis, Murphy Business Associates will help you gather the documents needed to formulate an asking price and come up with a deal structure. Not only will we help prepare you for a successful sale, but we’ll also work to maximize your market potential.

To learn more about how one of our local business brokers can help you sell your business, call Murphy Business today at (888) 561-3243.

 

Everything You Need to Know to Buy a Company

It’s no small decision to buy a company. If you’re an entrepreneur who’s looking for a new opportunity but don’t want to start a business from scratch, purchasing an established business is the way to go. 

While this approach allows you to skip some of the more time-consuming and costly parts of getting a successful business up and running, you’ll still have to navigate the process of finding a business to purchase and negotiating a deal that leaves both you and the owner satisfied.

As this process can be complicated, it’s important to learn what to expect ahead of time so that you’ll know what potential obstacles to watch out for. Read on for our step-by-step guide.

Start by learning more about yourself.

Before diving into the classified ads to see what’s available in your area, take some time to think about why you want to buy a company. Ask yourself questions like:

  • What experience, passion, and skills are you hoping to leverage in this new endeavor? 
  • What industries excite you, and why? 
  • What business types are you most comfortable with based on your professional history? 

Only once you’ve answered these questions should you move on to looking at businesses for sale.

Get to the bottom of why a business is for sale.

Once you’ve found a business that you would be interested in purchasing, it’s necessary to take a hard look at why it’s for sale. Of course, it’s completely normal for a business to go up for sale because its owner wants to retire or make a career change. However, it’s prudent to assume that there might be another reason for the owner’s departure and that this reason could also influence your ability to run the business successfully.

Whether the business plan is not conceptually sound, the location is out of the way for customers, or the brand is suffering from image issues, it’s possible that a change of ownership wouldn’t improve the trajectory of the business. On the other hand, the owner may be struggling with challenges that you’re well-suited to overcome due to your past experience and personal strengths.

That’s why it’s important to speak with the owner at length about any concerns you have. You can also reach out to current customers, employees, and neighboring businesses to get a fuller picture of what’s going on.

Do your due diligence.

The above research is just the beginning. Once you’ve decided you’re serious about buying a company, you’ll need to gather even more information of a legal and financial nature. In order to ensure this process is completed thoroughly and accurately, it’s best to partner with professionals, including an accountant, a business attorney, and a business broker, if you aren’t already working with one.

From licenses and permits to organizational paperwork, business financials, and leases, these professionals will help you review a range of documents to ensure you’re making a solid decision by moving forward with the purchase.

Prepare for price negotiations.

Tread lightly at this stage, as many deals start to unravel when buyers and sellers can’t come to an agreement about the value of a business. A business broker can be especially helpful with these negotiations, mediating when tensions run high and providing access to reliable business valuation services to facilitate an objective understanding of the business’s value.

In addition to agreeing upon a final purchase price, you and the seller must settle the details of the final sales agreement – including tangible and intangible assets, intellectual property, and customer lists – before you can finally call the business yours.

Overwhelmed? Get Expert Help to Buy a Company with Confidence

This is only a brief overview of the general steps you’ll need to take to buy a company. In fact, the process can be quite lengthy and complicated. If you’re a first-time buyer, it’s likely that you’re going to make some mistakes along the way. That is unless you have someone more experienced by your side.

A professional business broker can assist with the purchase process from start to finish, helping you figure out what type of business best suits your goals, assessing potential options, and negotiating on your behalf to get the best price possible. Rather than worrying about every detail, you can focus on the big picture and maintain confidence as you make important decisions about the future.

Learn how one of our local business brokers can help you buy a company today. Call Murphy Business at (888) 561-3243 for details.

 

Business Broker? Your Questions Answered

If you’re in the market to buy or sell a business, you may have come across the term “business broker” in your research. While business brokers offer valuable services that make it easier for businesses to change hands, their purpose isn’t always well-known to individuals who haven’t participated in this kind of transaction before.

Below, we have answers to some of the most commonly asked questions about business brokers.

What is a business broker, exactly?

The role of a business broker is to act as a mediator between buyers and sellers of businesses. Rather than trying to negotiate the details of a complicated agreement themselves, these two parties can rely on a broker to be their go-between.

The broker increases the likelihood of a productive discussion, leading to a deal both individuals can be satisfied with. This can be a huge time saver in what is often a lengthy process, and can also minimize the stress and uncertainty surrounding the weighty decisions involved in buying and selling a business.

Why do you need a broker?

In addition to the above, brokers offer valuable services for both buyers and sellers. When it comes to purchasing a business, a broker can advise entrepreneurs about finding the right purchase for their budget, personal strengths, and expectations.

Since brokers have so much experience in the local business market, they are well-equipped to recognize when a deal is not in the buyer’s favor, helping the buyer avoid making a decision they would later regret.

For sellers, brokers make it easier to connect with serious buyers and can weed out individuals who express interest but lack the resources or know-how to run a particular type of business. Brokers can also assist with paperwork and administrative tasks that could otherwise be overwhelming for sellers to complete on their own.

How much does a broker cost, and are their services really worth it?

Brokerage fees tend to run between 5 and 10 percent of the selling price of a business. In most cases, especially for first-time buyers, the services of a broker represent money well spent. It helps to think of the broker’s commission as a kind of insurance.

Sellers will gain peace of mind that their business is being properly valued during negotiations, while buyers will have access to objective advice that can help them make decisions with confidence.

It’s important to get a complete understanding of what services your broker will offer and what their fees include as you get started.

What qualities should I look for in a broker?

In order to get the most out of your relationship with a broker, it’s important that you select one who has their pulse on the business market in your local community. This in-depth knowledge will come in handy for connecting buyers with sellers and correctly assessing the value of a business.

In addition, you’ll want to find a broker who you can easily communicate with. Since their role is to negotiate on your behalf, it’s crucial that you feel completely understood when discussing your priorities and goals with them. Likewise, as business negotiations can get complicated, they need to be able to communicate legal and financial details in a way that makes sense to you.

Where can I find a professional broker?

There are several resources you can check to find a broker in your local area. You can start with the “Business Opportunities” section of local and regional papers to see who is facilitating the sales of businesses in your community.

It’s also worth taking the time to ask previous and current business owners about their experience with trustworthy brokers. They’ll be able to give you their honest opinion of how a broker benefitted them during the buying and selling process. If you don’t have any business owners on your contact list, try checking with the local chamber of commerce or asking your CPA or attorney for referrals to brokers in your community.

Are you in search of a reliable business broker to assist you with buying or selling a business? Contact Murphy Business today at (888) 561-3243 to connect with a broker in your area.