Generally, using a business broker is a good idea - especially if you have limited time to work with potential buyers, are not easily contactable or lack the necessary knowledge and skills to effectively market your business for sale.
A competent business broker will be experienced in the market, will deploy multi-faceted marking initiatives to reach potential buyers, will help compile sales documents, manage confidentiality issues, assist in setting a realistic price, and will help handle and negotiate the technical aspects of the sale without being attached to your business.
It is a good idea to visit several reputable business brokers (See our Business Broker directory) to gain a complete picture of services available. Some business brokers specialise in particular areas and may even have a list of prospective buyers who are just waiting for the right business to become available.
5 Reasons to Use a Business Broker:
1. To ensure your business is sale-ready.
Determine what needs to be done has been identified to boost the value of your business. They will look at any issues and provide advice on timing and preparing your business for sale.
2. Determine the market value of your business.
They will review your business and it's financials, check out the market and similar business sales to determine the true market value of your business.
3. Create a marketing plan.
Your broker will provide advice on how best to market your business and provide you with a campaign and spend schedule to flush out any potential buyers.
4. Manage enquiry and offers.
Your broker will vet buyers, help prepare offers and oversee the due diligence process. They will also provide advice on how best to manage your staff, supplier and customer relations.
5. Help close the deal.
Business brokers get paid on a successful sale. Your broker will help with the paper work, conditions of sale and anything needed to conclude the sale including staff stability and employee transitions.
Choosing a Business Broker
Look for a broker with a current, qualified buyer database who understands your market and knows how to reach the right buyers for your business. Ask about recent sales and speak to past clients where possible. For the full list of vetting questions to ask before you commit, see 12 Questions to Ask a Business Broker, and for a broader guide to selecting the right one, see How to Find a Top Business Broker.
An experienced broker can also provide an appraisal of your business's value using transaction data and recognised valuation methodologies, and will typically spread marketing across several mediums - print, specialist publications, and websites like nzbizbuysell.co.nz - to reach the widest qualified buyer pool.
The broker's fee is usually paid when the business is sold. Generally fees vary depending on the sale price of the business, but as a rule of thumb the larger your business, the more room for negotiating a fee structure. If you intend to market the business yourself while also engaging the services of Business Broker, then discuss this with your Broker and include an agreed and appropriate clause covering any fees due should you find a buyer independently of your broker. Ensure the broker will only disclose information to qualified buyers who have signed a confidentiality agreement, and that it limits the right of use of such information.
If in doubt, seek independent or legal advice prior to engaging the services of a broker.
If you're looking for a business broker then check out our links to Business Brokers NZ Directory and see whose actively using key platforms to market their client's businesses for sale. Here are some quick links to Auckland Business Brokers, Wellington Business Brokers and Christchurch Business Brokers.
Or check out our Business for Sale rates.
FAQ's
What are the benefits of using a business broker?
If you are looking to sell your business, consider the advantages of using a business broker. A professional business broker will ensure confidentiality, provide advice, help set your price, market your business, negotiate on your behalf, and bring your sale to a successful close.What is the purpose of a business broker?
A business broker is an agent or intermediary that assists in the sale and purchase of a small business. They help the business owner market, manage and secure the best price for their business. They will manage the process attending to the contractual requirements to ensure a successful sale and transfer.How much does a business broker charge in NZ?
This will vary depending on the size of the transaction, the location, business broker and brokerage company. In New Zealand this is typically around 7% - 9%, often with a minimum fee of $15,000 - $20,000. There can also be a marketing cost contribution - this can range from a few hundred dollars to thousands depending on the target market, advertising and type of business
By Richard O'Brien - NZbizbuysell
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