Many business owners believe they can successfully sell their own business. After all, they are the key salesperson for their company and believe they know it better than anyone else. While this may be true, selling your business is not like selling your product or service. It takes a unique set of skills, knowledge and connections, just like your business, that you likely do not have. A business broker is in the business of connecting qualified buyers to business sellers and possess a unique skill set: knowledgeable about valuation principles, financial statement analysis, taxation implications, inventory and goodwill issues, negotiating skills and knowledge and understand how to package, position and confidentially market the business for sale. They are an intermediary in the process whose role is to act as a link between people in order to try to bring about an agreement.
So, why would you use a business broker to sell your insurance agency when you know it best?
Confidentiality – A business broker will protect the identity of your agency and contact only qualified buyers through a blind profile – a document describing the company without revealing its identity. If you try to sell your own business, confidentiality is lost. You risk losing clients and employees – the very goodwill you are trying to sell!
Business Continuity – Selling a business is time-consuming for an owner, and with a business broker, the owner can maintain a focus on running the business when a broker is working on the sale. Do you really have the time to run your insurance agency and compile marketing materials, advertise, screen buyers, give tours and facilitate due diligence?
Potential buyers – Business brokers have the tools and resources to reach the largest possible base of buyers, including those the owner may not know about or be able to find. The best way for a business owner to truly feel comfortable that he got the best deal is to have several financially viable parties bidding for his business, which is much more likely using the resources of a professional business broker. Select a business broker that already has a wide network of buyers interested in insurance agencies.
Marketing – A business broker can help present your company in the best light to maximize the sale price. He or she has an understanding of the key values that buyers are looking for and can assist in identifying changes that can lead to a better selling price.
Valuing your Business – Putting a value on a business is a complex process. Every business is different, with hundreds of variables that have an impact on the value. Business brokers have access to business transaction databases that can be used as guidelines or reference points.
Balance of Experience – Most corporate buyers have acquired multiple businesses while sellers usually have only one sale. An experience business broker can level the playing field for a business owner making his one and only business sale.
Closing the Deal – Since the business broker’s sole function is to sell the business, there’s a much better chance that a deal will be closed in less time. The faster the sale, the lower the risk of employee problems, customer defection and predatory competition.