In part one of this two-part blog series, we went over some basics on why it pays to hire a professional business broker when selling your business. While you may think you can handle all the important factors here on your own, attempting a detailed business sale on a DIY basis comes with a number of potential pitfalls, including major risks like deals falling through or significant money lost.
At Utah Business Consultants, we’re happy to help with a variety of business sale needs, ensuring business owners and other employees are free to keep their focus on their daily tasks at hand while also maintaining precise valuations, quality buyer sourcing and many other elements. What are some of the other top risks associated with attempting a complex business sale on your own, without the assistance of a broker? Here are several.
No Qualified Buyers
One major area where business brokers provide value to business owners looking to sell: Identifying not just interested buyers, but also qualified ones. It’s important to note the difference here, as it’s likely you’ll have plenty of initial interest when you list the business for sale – but far fewer entities who are serious about their interest, plus have the resources to follow through.
Our business brokers have decades of combined experience, and we know how to identify qualified buyers quickly. We even have go-to resources for numerous industries, allowing us to source buyers immediately in many cases.
Due to a variety of factors, including the fact that you’ll be spread thin if you attempt a business sale while also trying to run day-to-day operations, a DIY sale often leads to timing issues. There are simply a huge number of details involved in most business sales, and the typical business owner doesn’t have enough hours in the day to handle these plus their normal job. Business brokers, however, will handle these details on your behalf.
Contracts that Don’t Go Through
While we wish it were not the case, up to 40% of signed business sale contracts never make it to closing. Whether due to due diligence, improper financing, overlooked legal issues or other concerns, there are many pitfalls – but far fewer if you work with a qualified business broker, who will identify these risks ahead of time and steer you clear of them.
Finally, there’s a simple reality at play here: It’s hard to stay objective about a business you own, especially if you founded it from the ground up. This may lead to unrealistic valuations or pricing, which in turn will risk upsetting potential buyers and torpedoing your sale. When you work with a business broker, however, they bring the objectivity you need to the situation, informing you of situations where you’re being unrealistic or stubborn.
For more on the importance of utilizing a business broker for your business sale, or to learn about any of our assistance with selling or buying a business, speak to the team at Utah Business Consultants today.