Nike's “just do it” slogan has become part of our popular culture. As business brokers, though, we'd want to add another word: just do it right!
Dealing with and overcoming challenges is almost second nature for most small business owners. They know how to build and run their businesses to make them successful. But they don't how to sell one.
Business buyers are looking for the right business under the right terms and conditions. But the vast majority don't know what that means. Some 90% have never owned a business before.
Business brokers bring buyers and and sellers together, providing the all-important expertise to bridge the gulf that separates the two “sides”, who start out with opposing goals. It's the brokers job to understand and match needs, managing the transaction and controlling the process, respecting time lines and channeling the flow of information required to bring the deal to a conclusion that is satisfying to both.
In other words, business brokers know how to do it right!
In Canada, business brokers represent the interests of both seller and buyer. This is known as dual agency. The broker commits to confidentiality, loyalty and full disclosure to both parties simultaneously. It's the brokers job to be impartial and fair, to get the right questions asked and answered. They act as coaches, guiding and educating both parties throughout the transaction.
These services are provided at no charge to buyers. The broker is engaged and paid on a commission basis by the seller when a business transaction is successfully completed. So the goal is to facilitate a successful transaction that results in both parties being satisfied with the outcome. A good broker is focused on finding the right business for the buyer, not finding the right buyer for the business. Selling a business is a complex and challenging process with serious financial, legal, tax and lifestyle implications. Starting the transaction with a buyer that has the necessary experience, skills, ethics, and credit quality is more likely to lead both parties to a successful outcome.
All negotiations go through the business broker – that gives both parties a chance to test the reasonableness of their requests. It's common for deals to include a training and transition period where the previous owners work with the purchaser for a stipulated length of time, so building a relationship of trust and respect throughout the transaction has continued importance.
You'll appreciate that perspective at due diligence and closing. Keeping everyone on track and ensuring that the lawyers and accountants have what they require, when it's required, is demanding. The broker will work with everyone involved to facilitate the outcome that both parties want.