Are the business brokers representing you or your buyer?

When the phone rang, it almost seemed too good to be true for a business owner who was considering selling their company. This individual was a business broker who was in the process of finding a potential customer who was interested in purchasing a company similar to his. This phone call seemed to have arrived at the ideal moment. The phone conversation set off a sequence of events that ultimately landed the company owner in a world of hurt, all because he was unsure whether or not the broker was looking out for his best interests.

Rushing into a difficult task:

The difficulty was that this business owner had recently begun to consider selling his company and had done very little to prepare the company for sale when the opportunity presented itself. The business brokers we're able to address several of the owner's concerns, including how much his company was worth in the current market, which was very helpful. It was a wonderful phone call to get.

The entrepreneur was thrilled and relieved and encouraged and hopeful, and he collected all of his data in a short period. This entailed attempting to arrange and make sense of his financial records, compiling a list of assets, clients, and suppliers, as well as price lists, rental agreements, and other related documents, among other things.

There was a feeling of urgency and excitement in the air. Even though not all of the data was available or completely correct, there was confidence that the broker would sort it all out and present it in a manner that made sense. Everything seemed to be fair. No, not really. As you can see, some of the information he gave should not have been made public when it was. First of all, it was ill-prepared, and second and foremost, he had not even obtained a signed confidentiality agreement.

Given his facts, the business brokers pointed out that the company was worth less than anticipated, but it was still regarded as a good bargain in the present market. The seller was angry, irritated, and disappointed as a result of the transaction.

A few facts struck home:

Business brokers represented the buyer, not the seller, in a transaction. The broker had a strong interest in assisting the buyer in obtaining a favorable outcome.

Having rushed through the preparation of the financials, the buyer had failed to represent the company's health properly.

A few months had elapsed since the lease agreement for his premises had been signed, and since he was renting from a close friend, the bargain for a new purchase was unlikely to be the same.

The business owner had not considered how much money he needed to sell his company or how much his company was worth when he started.

His company required a little amount more work to be sellable on his conditions.

These are just a handful of the things that came to light throughout the process. Fortunately, the seller's accountant saw that the offer was not good and strongly urged the seller not to take it. His company began to seem more appealing to prospective purchasers a few months after he started marketing it. With the knowledge that having many interested parties present at the table is advantageous, he is now in a stronger position to negotiate a much better bargain for himself.