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Seller's Corner |
| Congratulations!!! You have taken the first
and hardest step for any business owner. You have decided to investigate
the selling of your business. To many their business is their baby. They
have generally spent more time with it than with their family... Whether
it is physically or mentally being there. So now what do you do? |
The Seller's Strategy
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| Your next decision is how to go about
selling your business. This is critical. This decision will decide how
long it will take to sell and how much it is going to cost, along with
whether or not you will be happy with the price you receive. Your choices
are as follows: |
- FOR SALE BY OWNER (FSBO):
To Some Sellers, this may be their only choice. They are either
seeking to avoid the cost of the commission paid to Business Brokers
or they have a potential Buyer in the wings already. The Seller
will pay all the costs of advertising within this type of listing. The
Seller will not reach as wide an audience of potential Buyers.
Additionally the Buyers will not be pre-qualified to avoid wasting the
Seller's time. Nor will the potential Buyer in the wings pay as high a
price as other Buyers. This can be the choice that takes the longest
time to sell. There is generally no confidentiality protection on this
type of listing.
- OPEN LISTING: An open
listing allows the Seller to list their business with as many or as
few Business Brokers as they want. Each listing contract can be for
different time periods and/or different commission rates. The cost of
advertising is paid for by the Business Brokers involved. While this
sounds as if it is to the Seller's advantage, the truth is otherwise.
There is little incentive for the various Business Brokers to invest a
lot of time or money in advertising this business. Thy know they are
competing with many others to sell your business. Additionally with
all the Brokers and Agents involved, the chances of protecting the
confidentiality of the sale are slim. (This type of listing has the
least history of success.)
- EXCLUSIVE AGENCY: This type
of listing contract is between the Seller and one Business Brokerage.
It guarantees the right of the Seller to sell the business without
paying a commission to the Business Broker if the Owner
finds the Buyer. Additionally the Business Broker is paying for the
advertising and will spend more in terms of both time and money in
doing so. The confidentiality of the sale is maintained on the part of
the Brokerage and the potential Buyers they bring.
- SOLE & EXCLUSIVE RIGHT:
This type of listing contract allows only one Business Brokerage to
sell the business. This is where the Business Broker will spend the
most time and money in advertising. The Broker will access their
entire network of contacts, Buyers and sometimes other Brokers to find
the right Buyer for you. All potential Buyers are pre-qualified and
will have signed a Non-Disclosure Agreement (NDA)
to protect the confidentiality of the sale.
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Picking The Right Business Broker
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| By now you should have chosen to either
select a SOLE & EXCLUSIVE RIGHT or an EXCLUSIVE AGENCY listing
contract. Now comes the next step... Picking the Business Broker that is
right for you.
We will start out by eliminating all the Residential
Real Estate Agents and Realtors currently doing business in Arizona. |
