SELLING A BUSINESS YOURSELF VS HIRING A BROKER - Sellbusinessonline (2024)

02 Jun2021

Building your business from the ground up takes a lot of effort and suffering. Selling it can become complex, but the owner knows when it is right to make an exit. An entrepreneur must prepare for succession planning for a few years and decide on the course of the selling process. Most people consider hiring a broker for the sale. However, when yousell your business online, you get the freedom to manage things yourself.

It may sound a bit unnerving, but entrepreneurs are skilled in negotiations and identifying qualified candidates. Thus, it is not a challenging task and can be considered by business owners who do not want the interference of a broker or an agent. If you are confused between the two methods, here is some information to help you make the decision.01. Selling A Business Yourself

Selling your businessonline has made the process effortless and quick. An entrepreneur can easily do it without any hassles. Here are the advantages of selling the business yourself.

• No CommissionWith the broker gone out of the game, you do not have to pay for the commissions. The commission charges usually range between 6% and 12% of the selling price. In addition, some of them charge an additional upfront fee to start the selling process. Thus, you can save all those extra payments by selling yourself.
• Satisfying NegotiationThe broker is usually concerned about his commission and wants to get over with the sale so that he can assist his next client. There is no personal interest in getting the best price or an excellent buyer. However, as the business owner, you will make sure that you find the best fit for your business and sell it for a profit.
• You Know Your Business BetterDuring the due diligence process, the entrepreneur is the right person to answer all the questions. This is because he knows his organisation inside-out and will be able to provide all the correct information along with facts for the buyer to remain interested in the deal. Also, the business owner can identify a qualified lead quickly rather than wasting time on research.
• Sell IndependentlyWhile selling online, you will be in total control of the sale and make the most out of it. You can schedule meetings, discuss the financials, ask all the required questions, and negotiate effectively to score on all aspects of the deal. There is no dependency on a third party.

02. Hiring A Broker

If you plan to hire a broker for the sale of your business, it can increase the costs. Here are the advantages of hiring a broker.

• Presentation SkillsBrokers are salespersons who are experts in selling businesses and can present your entity in the best possible manner to make it look attractive to buyers. However, an entrepreneur is equally talented in making a pitch and can do a great job himself in preparing an enticing advert.
• SupportSelling a business needs a lot of paperwork, such as creating anon-disclosure agreement, purchase contract, organising financial documents, etc. The broker can provide the required help in putting everything in order. However, an entrepreneur already has an accountant and lawyer to help out with these details.
• Screening Potential BuyersShortlisting qualified candidates can take a lot of time and a broker can reduce this and provide you with a list of the best leads. However, it is possible that they may miss out on desirable buyers because they are only looking at high commission rates.
• Business ValuationBrokers are aware of the market trends and the prices at which similar businesses are getting sold. They understand the local market and can help in correctbusiness valuation.
• Database of CustomersBrokers operate day-in and day-out in the same industry. They are aware of the customer base of potential buyers and have contacts that help them to generate leads quickly. However, with the advent of dedicated business buying and selling websites, it has become more than easy to find buyers in one place.
• Save Time and EffortAs stated above, screening of buyers and paperwork can be time-consuming. When you are running a business, it can be challenging to devote time to the buying process. Thus, many entrepreneurs tend to rely on brokers for the purpose. However, selling online has taken away all the stress and legwork from the task and made it effortless. Even brokers these days use these listing websites to reach out to buyers.

Conclusion

It is apparent that if you sell your business online, you can get rid of the commissions and interference of brokers. On the other hand, hiring a broker can free up your time, but it may not be able to find you the best deal. Both the methods have their set of pros and cons, so make your choice wisely.