You have made the decision to sell your business – now how do you go about it? Generally, using a business broker is a good idea – especially if you have limited time to work with potential buyers, are not easily contactable or lack the necessary knowledge and skills to effectively market your business.

A competent business broker will be experienced in the market, will deploy multi faceted marking initiatives to reach potential buyers, will help compile sales documents, manage confidentiality issues, assist in setting a realistic price, and will help handle and negotiate the technical aspects of the sale without being attached to your business.

It is a good idea to visit several reputable brokers to gain a complete picture of services available. Some business brokers specialise in particular areas and may even have a list of prospective buyers who are just waiting for the ‘right’ business to become available.

Use a broker that has a current and qualified database, who understands the market, and knows how to reach the potential buyers of your business. Don’t be afraid to ask questions, for example how many prospective buyers are on their database, how much and where will they allocate on marketing your business, which newspapers and internet sites? As with any professional, it is a good idea to ask the broker about recent sales and for the names of satisfied clients you can contact.

An experienced business broker can provide you with an appraisal on the value of your business using transaction data and valuation methodologies. Remember it is the job of the business broker to expose the opportunity to the buyers who are likely to pay the highest and best price and to successfully manage the sale process.

Business brokers will often spread their marketing mix to include several mediums, for example newspaper advertising, specialist publications and internet websites like www.nzbizbuysell.co.nz which can expose your business to a huge database of buyers.

If confidentiality is an issue when selling your business, then any marketing can be tailored to exclude any specific identifying information of your business – by providing a general description only. Your broker will then screen potential buyers and guide the sale through to a satisfactory conclusion for all parties.

The broker’s fee is usually paid when the business is sold. Generally fees vary, depending on the sale price of the business but as a rule of thumb, the larger your business, the more room for negotiating a fee structure. If you intend to market the business yourself while also engaging the services of Business Broker, then discuss this with your Broker and include an agreed and appropriate clause covering any fees due should you find a buyer independently of your broker. Ensure the broker will only disclose information to qualified buyers who have signed a confidentiality agreement, and that it limits the right of use of such information.

If in doubt, seek independent or legal advice prior to engaging the services of a broker.