Career moves are generally complicated, and buying or selling a business is no exception. Making costly mistakes is easy, especially if you don’t have professional guidance during the sale process. However, buyers and sellers can use strategies that make completing that all-important sale or purchase possible.
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Work With a Business Broker
Whether you’re buying or selling a business, consulting a broker is always a good idea. Brokers understand local and national markets, which means they have insider knowledge both buyers and sellers can use to their advantage. In addition, brokers help clients establish and prioritize their goals, discuss various financial options, and determine the best times to enter or exit a market.
Determining the Value of a Business
Purchasers and sellers need an accurate estimate of a business’s value before entering into any transaction. Brokers work with appraisers and other industry experts to determine a fair value for a specific business. Sellers always want the maximum return on their investment while buyers look for the lowest possible price when purchasing a business. The final price will require negotiations and a little give and take by all parties involved. With the help of a broker, as well as other advisors, a fair compromise is reachable. However, establishing a realistic initial price is always crucial.
Prepare All Documentation in Advance
Sellers need complete and accurate documents that provide a true picture of the business’s financial status. Those documents should outline profits and losses for several years, describe any liabilities that will carry over to the new owner, and establish which assets are conveying. Buyers will need financial statements and documents proving their ability to complete a transaction. While the specific types of documents will vary depending on the type of business, all documents should be prepared in advance to eliminate unnecessary delays during negotiations.
Build a Team of Experts
Both purchasers and sellers need a team of experts to ensure a transaction flows smoothly. That team should include the broker, financial advisors, and attorneys. Each team member will play an essential role in ensuring all sale components are completed correctly and documentation is complete and accurate. At the same time, advisors provide advice throughout the process. At times, that advice might not be what one or both parties want to hear, but listening to the experts is strongly recommended to avoid mistakes.
Take Advantage of Additional Resources
While the advice of brokers, accountants, and attorneys should be heeded, business buyers and sellers are also encouraged to take advantage of online resources to make them more comfortable with the process. Online research into the nature of business transactions, comparable properties, and investment articles will reassure a buyer or seller they’re making the correct decisions. At the same time, if questions arise due to the research, the buyer or seller can ask questions that resolve any potential issues.
If you’re considering selling or purchasing a property in the Austin area, now is the time to contact a business broker for advice. As a rule, the sooner you begin the process, the better. The broker will help each client determine precisely how to proceed. That includes outlining objectives, preparing documentation, determining financing options, and setting a timeline. For more information, contact a local business broker today.