Don’t Be Fooled By Smoke & Mirrors
Unfortunately, not all business brokers are created equal and fair. We hear all too often from people calling Bonza after a horrendous experience with another company, being over promised services and then left out of pocket and no idea what job has been carried out or what progress has been made on achieving a sale. When you invest hard earned money into selling your business you want to know that the person taking care of everything is doing all they can to make this happen in the shortest time possible.
Unfortunately, ‘bad’ brokers will promise you the world to get you listed and by that stage it doesn’t really matter, you then have no choice but to trust them and hope it pays off. You have the right to ask questions and ask for proof in their claims, ask for reasons why it is beneficial to sell through them, why it’s worth paying tens of thousands in commission for their services.
Another tactic used unfortunately is the “bells and whistles” approach. They will tell you all these amazing inclusions to their package that have no effect what so ever on selling your business. Its really used as a lure to achieve a listing.
Below is a list of some of the most common phrases you may come across:
1. “I have a buyer for you now” – this is very common and a complete misconception, it is highly unlikely that they have a buyer just sitting there waiting for the call about your specific business. This is almost immediately followed by…
2. “I can sell your business very quickly” – although there is nothing stopping a broker from saying this, the fact is that guaranteeing a time frame – even as broadly labelled as ‘quickly’ is still not accurate and can immediately make you lose trust if not delivered.
3. “I can get you 3x the amount you are wanting for your business” – This almost always touches that little greedy monster inside us and can be enough for people to sign up.
Truth bomb – No buyer is going to pay for a business that is overpriced or doesn’t show value, no matter how great your business is.
4. “I have an international buyer” or “I can advertise your business overseas” – This one is sad because it is still being used and is highly inaccurate. Seven years ago, the visa laws changed in Australian making it significantly more difficult for international residents to gain a visa on the bases of purchasing a business. Originally it was the case and that privilege was abused and in turn changed. You can advertise all you want overseas but the likelihood of finding a buyer is slim to none.
5. “We advertise you on 35 different websites” – The problem here isn’t the fact that the business is listed so broadly, its that 9 times out of ten the sites these businesses are listed on are irrelevant to the specific industry or receive absolutely zero buyer enquiry. Advertising correctly means that the broker will list on business for sale websites that are used regularly by serious buyers and are monitored for use, why spend money on advertising if it’s pointless?
It pays to do your research prior to deciding. Before you begin your search, use the below list as a guide for attributes your business sales representative should demonstrate:
1. Experience & Knowledge – understanding the difference between business and franchise sales as well as involvement in an array of varying industries.
2. Project Management Ability – able to confidently communicate, have great time management skills to be able to respond quickly and negotiate effectively, thinking outside the box and taking control of a situation without leaving you second guessing.
3. Excellent Communication Skills – touched on in project management but the person representing your business needs to be able to communicate properly and buy that I mean, you as the owner need to be kept informed as to what is happening every step of the way and what development is happening and if progress is slow then there should be a discussion on how best to alter the direction to see if change is possible.
Be prepared to invest in your business sale, it can be attractive to list with a broker who charge nothing up front, but you need to ask yourself… “Am I being advertised correctly?” The best websites to list businesses for sale are expensive to advertise on and brokers will not generally up the cost to gain a sale. Don’t be closed off to considering an upfront investment in professional business sale management, preparation, support, advertising and marketing. Be sure this cost is reflected as ‘value’ of the service you receive and not robbery.
At the end of the day, you are going to list with the person who makes you feel comfortable and you genuinely like dealing with. Someone who can be fun but at the same time professional.
Contact the business sales experts who tick all the right boxes – Bonza Business & Franchise Sales.