Qualifying an Agent

When you sell your business there will be expenses that you’ll incur. One is the closing costs for the sale of a business. These generally range from $500 to $5000 depending upon the sale price and are typically split evenly between buyer and seller.

The other cost is a fee if you use an agent. This fee is paid at the closing of the transaction. Beyond these expenses the other cost associated with selling a business is the seller’s time.

If you use an agent to sell a business, be sure to choose one who is right for you.

You need an agent that will teach you the methods for pricing a business. Be on guard if an agent will not do so or if they encourage you to price your business more than 10 percent higher than the calculated value, which can prolong the selling process.

Request a copy of a typical Business Marketing Package. Evaluate it for professionalism and whether it adequately represents the total value of the business, particularly showcasing the opportunity. Require a commitment for appropriate local print advertising as well as Internet marketing.

Understand their commitment and methods for maintaining strict confidentiality. The last thing an owner needs is for employees, customers, suppliers, and a landlord to become aware of an impending sale.

Visit the agent’s office. Is it a professional setting where you would like your business represented?

Do not pay any upfront fees. An agent confident in their abilities will not charge fees upfront for listing and marketing your company.

Determine if they can provide a buyer all the types of service and assistance they require, such as financing, lease negotiations, etc.

Review the listing contract carefully and watch out for phrases such as Grant of Security Interest, Seller hereby grants Broker a security interest, or references to a UCC-1 lien. Also be cautious and aware of contracts that automatically renew.

DO NOT SIGN A CONTRACT THAT INCLUDES THIS LANGUAGE.

You have taken the first step in educating yourself. To learn more and understand how to maximize the value of your company contact us about  gaining control of your company’s value, building value in addition to earning profits, selling your business quickly and quietly when the time comes, viewing your business from the outside in, and gaining insight of your company’s value using industry comparisons. In addition to addressing the points just mentioned, our “Operations Assessment and Outlook Report” includes financial statement and balance sheet adjustments, risk analysis, financing options, and justification of the suggested sales price compared to the industry.

Prior to deciding to sell your business it’s important you understand the value of what you are selling – this will allow you determine what help you may need to be successful in the current market place. This will help you to determine the best timing to sell, what you need to do to prepare the business for sale, and any help you may require.

Diverse Business can help you with all your transactional needs from consulting and education services to serving as your selling agent.

For more information contact our office at: 972-233-1220