20 Reasons You Shouldn't Use A Broker When You are Selling Your Business

Nearly 80% of all business owners, even highly successful ones, admit that they do not have an idea for exiting their businesses.

Owners often fail to form succession plans because they need assumptions about the longer term which can or might not be true.

For example, a business owner may believe that his business will naturally pass to his spouse or other loved one . What happens, though, if that designated loved one is unwilling or unable to require the reins?

Another common assumption owners make that causes them to avoid succession planning is that the concept they're going to be ready to run the business until they die. they do not put an idea in situ because they do not wish to believe the likelihood of getting to go away the business before planned, perhaps thanks to unhealthiness or family problems.

What happens within the absence of proper exit planning is that am owner can find him or herself within the unanticipated position of getting to sell quickly, perhaps for fewer money than they have in retirement.

Frustrated, tired, stressed, and sometimes ill, business owners who got to sell make what they feel may be a logical decision and switch the method over to their local business broker.

Over the years, my partners and that i have reviewed over 300 selling deals and have come to the conclusion that employing a business broker could be the worst decision any seller can make.

We began to question the whole sales process, wondering why most businesses in America never sell, and people that do sell often do so under extremely unfavorable terms for the sellers.

Looking for common threads in those deals, we eventually came to the conclusion that a serious culprit hindering the business selling process is that the typical business broker.

This came as a surprise as we initially assumed the fallacy that somebody with the title "broker" is sctuslly experienced in facilitating deals.

The overwhelming majority of business brokers we've meet , however, have disproved this assumption time and again.

Here are just a couple of of the explanations that i think you ought to NOT engage the services of a business broker if you're trying to sell your successful business.

1. Most business brokers haven't owned a business themselves.

2. they're often more motivated by commissions than they're by doing what's right for both buyer and seller.

3. In most states, brokers aren't required to possess any training, licensing, or continuing education, unlike land or insurance brokers.

4. Many of them are super at selling their services, but poor at actually providing those services once you've paid.

5. they might care less if they get referrals, in order that they don't care if clients complain about them to others.

6. tons of times they're simply lazy and do not do much of anything to assist the vendor .

7. Many brokers lack basic financial literacy, business intelligence, and organization that's essential to a successful outcome.

8. they do not skills to plan and excute a successful sales strategy.

9. they struggle and canopy their lack of data and training with slick self-serving rhetoric that creates them look better than they really are.

10. Many brokers get into business because they've failed at other ventures.

11. They often haven't any clue of the way to properly evaluate a business, thus potentially cheating the vendor out of thousands of dollars or causing the sale to tug on longer than necessary.

12. they do not understand risk.

13. Often business brokers let sellers think a business is worth regardless of the seller wants, however unrealistic that figure could also be , just to urge the listing. They then pass the buck to the potential buyer, who is formed bent be the person for showing the vendor the business isn't worth anywhere near that much.

14. Business brokers often ignore confidentiality agreements.

15. Many are willing to lie, as long because it serves their purposes.

16. Commission-hungry business brokers are hooked into getting mass listings because they know that without an inventory there's NO possibility of getting a commission.

17. that specializes in mass listings means they do not have the time to push the listings they get, causing listings fall flat the cracks.

18. Many business brokers don't understand due diligence.

19. Most brokers will never tell a seller the reality about their success rates: 87% of listings NEVER sell in the least , and of these that do, 3 out of 4 FAIL to satisfy the sellers initial goals. Sellers have but a forty five chance of a successful exit.

20. Brokers are known to lie around their personal track records. Many brokers are lucky to finish just 2 successful deals during a year, much less the 10-20 about which they're going to brag to you.

These are only a couple of of the explanations why I urge potential sellers of companies to avoid using business brokers.

Instead, it's far better to hunt out the recommendation of a business acquisition specialist; someone who has experience within the process of shopping for and selling businesses, who thoroughly understands valuation, and who isn't focused on getting as many listings as possible but rather on the requirements of the vendor and buyer.