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Shall I sell it Independently, or hire a broker. Pros and cons?

What are the benefits (if any) of hiring a business broker against going to market independently. I have a small IT-services business to sell (sales about $10 million).

Armin Laidre

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Answers (4)
Kimberly Deas
Murphy Business & Financial Corporation

There are pros and cons to using a broker, but for a business this size, confidentiality is critical and also keeping the process moving once you have found a buyer. This if often hard to do when you are running a business.

Here is an article that may help you decide whether to engage a business broker in your project.

http://sellyourbusinessflorida.com/should-you-sell-your-business-yourself/.

Kimberly Deas
Murphy Business Broker

Oct 2, 2013
William Bruce, ABI
William Bruce Business Sales & Acquisiti
Baldwin County, AL
Premium Broker

Here's an article that may help you decide whether to engage a business broker in your project:

"What Are Business Brokers and What Do They Do?"
http://williambruce.wordpress.com/2013/09/05/what-and-who-are-business-brokers/

William Bruce, President
American Business Brokers Association

Sep 27, 2013
Joshua Lindsey
American Business Brokers
Premium Broker

If you specialize in buying & selling businesses or you already have a buyer in place making an offer then get your lawyer and sell it yourself. If not make sure you hire a great broker not the average broker who couldn't make it in business so they decided to start selling them for others. After all this is your baby, so you want someone who can show you their results. I sell about a business a month for others which is about $5 million to $10 million in year in gross sales. I have sold 5 personal companies and took one public in 2006. I also own a self funded capital group that purchases about 1 deal a year ( $1million-$10 million)
So in summary work with a business expert not a broker that failed at business.

Sep 24, 2013
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The BAF Group LLC
MD

The answer is fraught with additional questions, all of which begin with, "It depends..." It depends on you (the Seller) and his/her skills at selling the business, rather than the services and products of the business. It depends on the amount of time you have to devote to doing nothing but contacting potential Buyers, answering their questions and qualifying them as real or tire kickers. It depends on who the Buyer is; some take more time than others - some take enormous amounts of time! It depends on the business in a number of ways. We work with Buyers to get businesses financed, because it does no good to get a contract and not be able to get the financing done. IT companies have little to no tangible assets in most cases, so financing is always a problem. (If it is Software and the programs are Patented, that counts as a tangible asset, so there are exceptions.) Some transactions will require some Owner financing, depending on a lot of issues; many services fall into that category.

It depends on the Broker. If it is a Broker that routinely handles 200 listings, because most of them are C-Stores and Liquor Stores, it would be a waste for you to work with him/her, on the sale of your IT service business. You need a Broker that handles a small, select number of listings, so your Company can be individually promoted and sold on its own. Business Brokerage is an horrendously time consuming effort. It is unlike Residential Real Estate. We don't just put a sign on the business' lawn and an ad on MLS and hope other agents will sell it for us. (This is not to insult Agents in that field - we could not do what they do, either. Their job is far more complex than is explained, here.) Our efforts call for incredibly personalized communication with Buyers, which again reduces the number of listings we feel we can can competently take on, at any one time.

Confidentiality comes into play with that individualized communication. In most cases, we operate with extreme care, in an effort to safeguard the name of the business we represent. With some businesses, if it became public knowledge that the company was for sale, the employees and customers could and would disappear; some suppliers might alter their ways of doing business as well, to the detriment of the Seller.

There are more issues that come into play; these are only some of them. In the vast majority of cases, the commissions we charge have been readily viewed by Sellers as having been worthwhile both in terms of financial gain for the Seller, as well as in services rendered, which would otherwise be required of the business Owner, him/herself.

Sep 20, 2013