The top reasons sellers hire brokers are these:

  • Brokers know how to sell businesses; most sellers don’t 24%
  • Seller doesn’t want to be distracted from running business 16%
  • Confidentiality preservation and knowledge of what/when to show buyers 14%
  • Access broker’s database of potential buyers and investors 13%
  • Maximize price buyers will pay for the business 9%
  • Owner does not know how to find buyers 8%
  • Prepare owner to sell and prepare business for sale 5%
  • Broker understands and can depersonalize negotiations 5%
  • Explain and handhold seller throughout selling process 2%
  • Owner afraid of trying to sell by-owner 2%
  • Help buyer obtain financing 2%

All 62 reasons:

  1. Access broker’s or an advisor’s database of potential buyers and investors
  2. Advertising run and paid by broker
  3. Affiliated brokerage or advisory offices may attract more buyers
  4. Assistance during escrow closing
  5. Background check on potential buyers run by broker or advisor
  6. Broker or advisor can confer with seller, legal and tax counsel about terms of sale
  7. Broker or advisor understands and can depersonalize negotiations
  8. Brokers and advisors enable buyers and sellers to access a broader pool of potential partners
  9. Brokers and advisors have broader third-party prospective from done deals and failed deals
  10. Brokers and some advisors know how to sell businesses; most sellers don’t
  11. Business advice re contracts (exclusive of legal advice)
  12. Buyer competition: Create and manage it
  13. Coach sellers to answer buyers’ questions and concerns
  14. Compensation basis is commission upon sale or partially contingent upon done deal
  15. Compile necessary information about the business
  16. Confidentiality preservation and knowledge of what/when to show buyers
  17. Continual followup with buyers for decisions
  18. Control buyers: Brokers and some advisors know what is appropriate and inappropriate
  19. Dealmaking team: Referral to accountants, appraisers, brokers and lawyers
  20. Deals almost die numerous times; Brokers and some advisors know how to revive them
  21. Define best probable price and terms before going to market
  22. Determine best offer price
  23. Determine best selling price
  24. Determine best time to offer business for sale
  25. Develop marketing strategy and plan its implementation
  26. Disclose, to buyers, sensitive information about the business
  27. Explain and handhold seller throughout selling process
  28. Financial analysis and recasting by broker or advisor
  29. Help buyer obtain financing
  30. Initiate contact with likely purchasers
  31. Intermediary can speak for the seller
  32. Maximize price buyers will pay for the business
  33. Mediate and negotiate with buyers
  34. Minimize interference with seller’s management of company
  35. Most buyers start with business brokers and Internet searches
  36. Negotiating strategy
  37. Owner afraid of trying to sell by-owner
  38. Owner does not have relevant capability to sell by-owner
  39. Owner does not have time to try to sell by-owner
  40. Owner does not know how to find buyers
  41. Owner doesn’t know the probable price buyers will pay
  42. Owner needs quick sale due to pressing crisis
  43. Owner referred to broker or advisor by happy seller
  44. Prepare owner to sell and prepare business for sale
  45. Prepare two versions of the business profile (teaser and full)
  46. Professional advisor recommends owner hire broker or advisor
  47. Qualify and screen buyers
  48. Receive, present and help evaluate purchase offers
  49. Reconcile differences between tax returns and financial statements
  50. Reduce frustration during offering and sales process
  51. Seeing the business from the perspective of buyers
  52. Seller does not have a network of contacts with access to buyers
  53. Seller does not understand the implications between strategic and financial buyers
  54. Seller doesn’t want to be distracted from running business
  55. Seller fears adverse effect if premature disclosure (about sale) to key employees and lenders
  56. Showcase the seller’s business to buyers
  57. Time savings broker or advisor provides sellers
  58. Understands local marketplace of businesses for sale
  59. Understands seller’s industry
  60. Unsolicited offer from a buyer requires expert help
  61. Using broker is the only way sellers know about
  62. Wants to get the highest price

 

By: Ted Leverette

Copyright 2011 Ted J. Leverette, The Original Business Buyer Advocate ®, “Partner” On-Call Network LLC.

Permission was granted to reproduce this report.