Business Brokers act as intermediaries between buyers and vendor’s of a business. They may represent either party in the transaction, and do not take possession of goods or property, or deal on their own account. Brokers fill the important marketing function of bringing buyers and sellers together and helping them negotiate mutually beneficial agreements. In addition, they facilitate transactions by providing expertise and advice.
Brokers provide numerous benefits to both buyers and vendors, for example, vendors benefit because they do not have to spend time searching for buyers or vetting potential purchasers.
Qualified Brokers have access to a large data base of clients that are in the market to purchase a company, and they know how to attract and screen potential buyers much more quickly than do typical business owners. The Broker may also be able to help the vendor place an accurate value on his business, devise a strategy to transfer ownership over time, address necessary paperwork, and overcome legal hurdles through the escrow process and more importantly have proven routes to market to insure a prompt sale.
The buyer also benefits from the Broker’s access to business buying and selling channels. A buyer that goes to a Broker may be able to find a business that suits his abilities, wants, and financial situation much more quickly than he could working independently. Moreover, good business Brokers will not accept businesses that are overpriced, dependent on illegal activities, or otherwise fatally flawed, thus saving buyers the legwork of finding this out for themselves. (Business Broker Spain rejects as many as half of the businesses that they are asked to sell for these reasons mentioned above!) In addition to screening, the Broker can help the buyer determine what the client can afford and may be able to assist in arranging financing to purchase the business, and, as with vendors, business Brokers can provide help with licenses, permits, and other paperwork. It is the Broker’s duty to ensure that the interests of the buyer (and the vendor) are protected by any contracts or agreements such as an NDA relating to the sale.
All of these services can be of great value to business buyers and vendors, but perhaps none is as valuable as the Broker’s position as a buffer between the two sides. The skilled business Broker will diplomatically field and address sensitive questions and issues that, if left directly between the buyer and vendor, might damage or ruin the prospects for completing a deal. Brokers that can address the concerns of one side without offending the other are invaluable to the negotiating process.
