Selling a business is commonly compared to selling a house. It’s not exactly the same, while you may see some overlaps between the two actions.
In any case, even when selling a house, the aid of a real estate agent is key to maximizing revenue and ensuring a good deal with the most compliance. Likewise, the help of NYC business brokers should make your business sale more profitable and quicker than going alone.
Should I Sell My Business Without The Help of an NYC Business Broker?
Generally, it’s not advisable to proceed without the assistance of a business broker.
NYC business brokers are not only there to mediate between a seller and an investor. Top business brokers (NYC and elsewhere) escort the potential seller through all the stages of the selling process, from the moment it’s decided that the business should enter the market to the moment that the papers are drafted and signed.
A good representation is essential to a successful trade. A business agent is not just like your regular real estate broker that places a “for sale” sign on the establishment’s window. A competent brokerage firm has an organized database of solvent prospects with whom you may start negotiations.
If you feel you’re not financially able to afford the best business brokerage firm in town, you can still get the aid of small business brokers. NYC is packed with excellent brokerage firms or agents specialized in both big and small businesses alike so that you may obtain support even at a mom-and-pop level.
These are, in a nutshell, all the benefits of hiring a competent NYC business broker.
1. Pricing and Negotiation
Many business owners tend to fall under two extremes: Either they value their ventures way too high due to the emotional investment they made, or they settle for the lowest price to find liquidity.
Buyers, naturally, would love to buy at bargain prices, though, for the most part, they would be wary of businesses that could reasonably be considered extremely undervalued.
Skillful NYC business brokers know how to settle for the right valuation using various technical metrics that can be verifiable to ensure a buyer’s trust. For this purpose, the broker will require that you provide financial statements and other relevant documentation.
They also excel in the art of negotiation. It bears repeating that, on many occasions, business owners negotiate their terms based on raw emotion. The help of a qualified business broker is crucial in order to inject some semblance of objectivity and reason into the negotiating table while trying to maximize your gains within the parameters of current market conditions.
Brokers also ought to have enough experience to manage all the possible setbacks that may arise with closing attorneys and escrow companies during the final phase of the negotiation, as the parties sign the papers.
2. Profiling and Marketing
A good NYC business broker knows how to spot a good investor better than a regular business owner, owing to the experience that the former has in these kinds of operations.
One of the hurdles of selling a business is finding time to keep the business going while doing all the errands related to the sale. With a diligent business broker, the owner doesn’t have to waste precious time dealing with unsuitable buyers.
Moreover, NYC business brokers are knowledgeable about the marketing tools needed to find a qualified buyer and the strategies that must be applied in the business market to secure a great deal in the shortest timeframe. They will additionally assist buyers in preparing their respective letters of intent and offers.
Apart from optimal buyer profiling, a thoroughly trained business broker is capable of drafting a plethora of confidentiality agreement models to suit a given prospective buyer. They know their way around this so that you remain under the radar. Only those with a tangible possibility of buying your business would know what you’re selling.
In many cases, brokers will demand a financial statement from the buyers along with their signature on the agreement paper as a way to guarantee that they will abide by it.
A business broker may be able to take the helm and coordinate with the rest of the support team (consisting of attorneys, lenders, accountants, etc.) as well as outside advisors, all of this in the hopes of making the process much smoother and taking some of the burden off your shoulders.Read More
One of the main questions or concerns coming from business owners planning to sell is _”how much should I ask for my business?”_ A trustworthy business broker may be qualified to perform an accurate and competent business valuation for ascertaining a fair price that can attract investors while securing profit for the client.
Moreover, there are other reasons you may want to perform a business valuation. NYC business valuation experts can be useful for shareholder disputes, divorces, or tax procedures that require this information. Choosing the correct professionals for these types of jobs is crucial for avoiding further problems down the road with the tax authorities or with a potential buyer.
How Difficult Is It To Perform a Business Valuation? (NYC Businesses)
Defining the value of a business is not as easy as entering a building and making vague assumptions. Running a business is already a highly complex endeavor just in its most basic operations. Evaluating a business’s fair price requires a profuse amount of technical knowledge about financial indicators, accounting, and market trends in general, a knowledge that many business owners simply do not have.
Of course, if you own a fairly small business, a DIY valuation is a possibility. Nevertheless, a business valuation done by a certified expert adds lots of credibility to the process in the context of most juridical acts.
Business Valuation NYC. How it’s Done?
Determining the value of a business requires looking at a myriad of different indicators and variables. There are usually three main approaches to business valuation:
- COMPARABLE COMPANY ANALYSIS is a relative valuation method that, as the name might suggest, compares the current value of other businesses of a similar trade and size by glancing at several trading multiples or metrics such as earnings, sales, market capitalization, and stock value per share.
- PRECEDENT TRANSACTIONS ANALYSIS takes a similar approach to the comparable company analysis but mostly focuses on recent business sales in the same area. To achieve this, the broker looks at a recent local business valuation (NYC businesses sell at different prices from those of other regions) and uses it as a reference. However, this technique requires that the professional is readily aware of current market dynamics, as his/her calculations could turn outdated very quickly.
- DCF (DISCOUNTED CASH FLOW) ANALYSIS is a detailed assessment of the business’s intrinsic value based on future cash flow expectations, which is basically a projection of future earnings. This is the most extensive business valuation model, but also usually the most accurate.
As you may see from the onset, a valuation can be a pretty challenging procedure that requires expertise, time, and patience.
Get Your Business Valuation From Experts
Do you have an NYC-based trade that needs a business valuation? NYC business brokers should be able to help you in this regard. By hiring valuation services from a reputed brokerage firm, you’ll be able to provide the most accurate information regarding the fair price of your business to a potential investor or interested parties in an administrative procedure or legal dispute. Our brokers will use the most adequate methods according to the nature and needs of your enterprise.Read More