When the time comes to sell your life’s work, you can’t trust your business, your name, and your financial future to just anyone. While many business brokers focus on small, family-owned businesses, few business brokers in Florida are qualified to handle larger transactions.
How can you ensure that you’re working with the right business broker for your needs? Before selling a business in Florida, it’s crucial that you carefully evaluate sell side brokers to identify the best possible firm to help sell a business.
If you are not sure where to start, here are some essential factors to consider before selling a company in Florida. There are three key metrics a potential business merger and acquisition firm should be concerned with.
Those three metrics are sales price, close rates, and quality of the offer(s). The best firms are concerned with all three of these metrics, and they should have proven results to back them up. Remember: metrics are worthless without hard data behind them.
What is the broker’s close rate? According to recent industry reports, a meager 25% of businesses listed for sale are actually sold in the end. And, to be honest, there’s no excuse for this poor performance. In a recent survey of business brokers, 63% reported that they saw more business owners looking to sell in 2016 and more qualified buyers looking to purchase. And with major tax cuts on the horizon, you deserve to work with business brokers who know how to close.
Case in point: Aberdeen Advisors has a 100% close rate with manufacturing clients, and our overall closing rate is currently 83%.
What size clients do they work with?
So-called “mom and pop shops” deserve help selling their business, too. Yet larger companies need more support when selling a business.
Before hiring a business broker, be sure to ask about the size of the businesses they typically work with. For instance, our firm regularly represents firms with average annual revenues between $5 million and $100 million. Simply put, the average broker will struggle to handle the complexity that comes with larger acquisition negotiations.
How many offers will they attempt to generate? While local, family businesses can usually be sold after attracting a single offer, that strategy will almost always result in lower bids when larger companies are involved. At Aberdeen Advisors, we strongly believe that generating multiple bids will ultimately result in higher sale prices. We have the data to back up this approach: 96% of our clients typically receive more than one offer.
Finally, before deciding to work with a broker, it’s important to understand the process they will use to generate bids in the first place. Without an understanding of this complex process, you are negotiating blindly. To put yourself on the strongest footing, you need to work with advisors who have a reliable process towards marketing and selling businesses like yours.
Of course, these are just a few of the essential factors that need to be considered before choosing a firm. However, if you want to learn how to choose the right business broker before negotiating one of the most important deals of your life, this would be an excellent place to start.