Should You Approach the Owner Directly or Work through Business Brokers?
Business brokers ask commission and you might think that by approaching a business owner directly that you will save money, but be careful. With such, you are at considerable risk of buying a sinking boat without even realising it. Below are some of the top benefits of making use of experienced business brokers when you contemplate buying a business in South Africa.
Without the assistance of business brokers, you will simply fly blind when it comes to the market related value of a business. . You should be wary not to pay more for a business than its actual market related valuation. If you’ve “overpaid” you will not be able to recoup the loss. Working with business brokers that are experienced in conducting business valuations helps you to pay a reasonable price. Experienced brokers use relevant formulas in calculating value and they also consider the current market prices. As such, you will benefit from their expertise.
Never buy a business without doing our own investigation into the affairs of the business and conducting a proper due diligence. This is the process in which you determine whether the performance of the business, as stated, is indeed true. It also helps you to identify underlying problems or potential risks. Professional business brokers will be able to guide and advise you during such due diligence. Since they know what to look for and which experts to call in, you can expect their services to be of exceptional value.
Negotiating a Fair Deal
The business brokers have already established a relationship with the sellers. They know how much the sellers are willing to drop their selling prices or when purchase offers are simply ridiculous. They can advise you regarding fair offers and act as intermediaries in the price negotiation phase, thereby helping you to pay a reasonable
amount number for the business. In addition, they are able to assist with negotiating a new and favourable lease.
Help with Getting Finance
In many instances, buyers require some sort of finance in order to purchase their dream businesses. Knowing which lenders are willing to assist and what the requirements are can help to ensure successful applications. The business brokers already have a list of finance backers and often have established relationships with such financial service providers. In addition, they can help when it comes to owner finance structuring.
You can rest assured that business brokers understand the importance of confidentiality. Indeed, you can expect to sign a non-disclosure agreement before you will be given insight regarding the finances and trade secrets of the businesses for sale.
Many more reasons exist for using business brokers rather than trying to find and buy directly from owners. There’s always a reason why an owner or seller doesn’t want to use a professional business broker. View our portfolio of businesses for sale or give us a call to help you find one that meets your requirements.