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Business Brokers - How to Deal With Them As a Buyer?

Guest post by: Omar Kettani

Article Overview: Business Brokers are very busy professionals who focus in helping business sellers find the right buyer for their businesses. However, business brokers can be of a great help to potential business buyers who understand the rules of the game. This article explains how savvy business buyers can make the most of their relationship with brokers.

Business Brokers - How to Deal With Them As a Buyer?

Business brokers/Intermediaries specialize in helping business owners sell their firms. Most brokers represent the sellers rather than the buyers. As a result, these intermediaries are responsible for qualifying buyers to weed out "tire kickers" and make sure that only buyers with the motivation and financial resources to purchase a business are presented to sellers. There are two reasons for the need to qualify buyers: 1. Save the broker's and sellers' time. Statistics have shown that only 10% of buyers actively looking to purchase a business end up buying a company. The other 90% never buy any business in their lives.

2. Protect the sellers' confidentiality. The company could be substantially harmed if the word goes out that the business is for sale. Confidential information should only be given to serious buyers to reduce this risk.

What should a buyer do to be considered a serious buyer?

1. Spend the necessary time: Buying a business is time and energy consuming. Serious buyers are not afraid to devote their time to research the right business. Intermediaries generally require that buyers come to their office for a meeting before providing them with more information. Buyers who negotiate where to meet or require considerable information before meeting are generally considered not very serious about buying a business.

2. Show proof of available financial resources: Brokers only work with buyers who can demonstrate that they have the financial capabilities to purchase the business or borrow the necessary funds. Buyers should not be offended when asked for proof of financial capabilities.

3. Show focus and determination: Asking information about too many unrelated businesses is generally interpreted as lack of focus and discourages brokers from working with buyers. Unfocused buyers are very difficult to work with as brokers cannot identify their needs and as a result cannot help them.

Business brokers can be an excellent source for detecting the right company to purchase. They know the market and can help serious buyers locate and purchase profitable firms that fit well with buyers' personalities and goals. However, buyers interested in getting the most value from brokers should be ready for purchasing a business and should prove it.

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Article Tags: business brokers, business buyers, business sellers, relationship



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