A business broker is a trained professional who helps people buy and sell businesses. They are instrumental in helping sellers mold their business into ones that are ready-to-sell.
To sell a business, a broker will provide many ins and outs to help with the process. Marketing is an important step in this process and can make or break the success of the sale, for example.
Finding the right business broker may be cost a seller up front, but in the end having this resource will save time, stress, and money.
In brief, brokers know what a ready-to-sell business should look like, how to attract buyers, and that knowledge will get sellers the highest price possible.
We have provided a list of 10 key characteristics that brokers work to establish when sellers come to them.
Buyers are looking for a business that has a:
1. Strong Financial Performance
The bottom line is, buyers are looking for consistent revenue and profit growth. Brokers will help to provide them with clean and accurate financial statements, which depict a strong cash flow and manageable debt.
2. Diverse Customer Base
No single customer should represent a disproportionate share of the business’s revenue. Buyers are looking for loyal and repeat customers, but also want to draw from a diverse pool.
3. Scalable Operations
Efficient and well-documented processes and systems are important for buyers. They are looking for the potential for growth without a significant increase in operational costs.
4. Solid Market Position
Strong brand recognition and reputation are important. Brokers will showcase any significant competitive advantages a business has in the market.
5. Clean Record
Taking care of the boring stuff like keeping up-to-date licenses and permits, as well as any pending legal issues or major liabilities will better attract buyers.
6. Assets that are Tangible and Intangible
Well-maintained physical assets, such as equipment and property, and valuable intellectual property, trademarks, or patents draw buyers.
7. Clear Path for Growth
Growth potential is a characteristic that attracts buyers. They are looking for opportunities for expansion, whether through new markets, product lines, or customer segments. Brokers can help with creating a clear strategic plan for future growth.
8. Clean Business Operation
To showcase how a business runs efficiently, buyers are looking for well-documented policies and procedures, efficient inventory management, and a reliable supply chain.
9. Good Reputation
Positive customer reviews and testimonials, as well as strong relationships with suppliers and partners are selling points that draw buyers. .
10. Devotion to Digital Presence and Marketing
There’s a reason business brokers insist on investing time and effort into marketing. It ensures a solid start to the sale process and gives sellers the best chance of success.
Some marketing benefits brokers often provide include:
- An up-to-date website and active social media presence
- Effective digital marketing strategies
- Access to media, websites, and real estate magazines
- Access to database of qualified buyers and their emails
- Expertise developing marketing strategies
- Professional experience creating business profiles
- The creation of two primary documents — A teaser (sometimes called a “blind profile”) and a confidential information memorandum (CIM)
Ensuring these traits are in place can make a business more appealing to potential buyers and can often lead to a higher sale price.
Using a Broker
Using a broker can ensure that these foundational traits are visible and attract buyers. For example, brokers who provide great marketing attract the right buyers, justify asking prices, and all allow sellers to negotiate from a position of strength.
Preparing a business for sale means making it attractive to buyers. With these traits, mixed with the experience, connections, and drive of a broker, will deliver the desired results for sellers.
For the best business broker experience that can provide these vital marketing services, call (248) 220-3274 or email nadir@mibizbroker.com.