Unlike Real Estate agents, who need to understand the readily available comparative house and sales data, professional Business Brokers should be able to source comparative business and sales data which is not readily available to most business professionals.
Is now your ideal time to buy or sell a business or franchise? If so, you will need a qualified team of industry professionals working with you and in your best interest to ensure you achieve the best possible sale or purchase outcome. One of the most integral members of the team of business professionals assisting you with the purchase or sale of a business or franchise is a Business Broker.
There is an old saying "a good lawyer knows the law, but a great lawyer knows the Judge".
Well, it can also be said that the difference between a good Business Broker and a great Business Broker is measured by the level of gratitude expressed by both the buyer and the seller at the conclusion of a successful business sale.
What does a Business Broker actually do? Business Brokers help people buy and sell businesses, similar in the way Real Estate agents help people to buy and sell properties. Professional, qualified and experienced Business Brokers have specialised skills, training and knowledge required to professionally service clients looking to buy or sell a business, taking into account the unique circumstances of each business, buyer and seller.
Unlike Real Estate agents, who need to understand the readily available comparative house and sales data, professional Business Brokers should be able to source comparative business and sales data which is not readily available to most business professionals. Business Brokers also need to understand complex and detailed business valuation methodologies as well as numerous other factors which impact a business’s value. These factors can include, but not limited to:
• Understanding a business’s financials, P&L’s, balance sheets, etc
• HR matters
• The value of supplier and customers contracts and relationships
• Intellectual property
• The value of a lease
• The value of an online or partially online business versus a similar business with a physical location
• The implications or impacts of a strong reliance on an owner;
• A business being included/involved in a ‘roll-up’ or, that might be associated with an emerging or eclining industry.
Professional and experienced Business Brokers should possess an incredible amount of knowledge and a clear understanding of the business, the client, the buyer, the landlord, the market, the region the business is located, the industry, how to best negotiate with the buyer and seller, the accountants (on both sides of the transaction], external advisors, valuers and the solicitors (on both sides). They also need to be able to understand the value of a business,
which valuation methodology is most appropriate for that business (ie; ROI, Capitalisation rates, DCF, Future maintainable earnings etc) and which profit figure is appropriate in each case (EBIT, EBITDA, PEBIT, PEBITDA, SDE, ROT, etc) as this will change from business to business and is industry dependent.
Additionally, a professional Business Broker must be aware of changes which impact a business’s value over time and have the skills to manage the confidential marketing of a business without disclosing the location and name of the business. They should also employ a rigorous confidentiality process which safeguards confidential and commercially sensitive business or franchise information.
If you are considering buying or selling a business or franchise, or you’re a franchise system looking for professional representation, it is recommended that buyers, sellers and franchisors work with experienced, professional and licenced Business Brokers and Business Brokerages who are members of the Australian Institute of Business Brokers (AIBB) or accredited through the AIBB. AIBB members are accredited and comply with the institute's code of ethics.
For information about the AIBB, or to find an AIBB member or an Accredited Brokerage near you, call 1300 79 66 67, email email@example.com or visit http://www.aibb.org.au or to contact Ian Jones mobile 0402 111 500, phone 1300 BROKER (1300 276 537).