What are the Responsibilities of a Business Broker?

What are the Responsibilities of a Business Broker?

The transfer of ownership of a company is a long, arduous process. The decision of the business owner alone consists of a rigorous personal and market assessment. Is selling the company a good idea? Has the competition been too tough that exiting the market is the best option?

For business owners, going through the sale would require outside help. That’s the job of a business broker, but what is a business broker?

The Intermediary

A business broker is tasked to find a buyer of a seller’s company. Acting as a buffer between them, brokers discuss pertinent issues and processes with the potential buyer, communicate it with the seller, and see if a deal can be made. Fundamentally, the transfer of ownership includes how a fair price is determined, ensuring an orderly financial position, negotiating the price, getting through escrow, and closing the sale. The business broker manages all these.

Business brokers also must ensure confidentiality by requiring potential buyers not to disclose any details of the sale. A business broker, which normally charges a commission of 5% to 10% of the sales price, is expected to be a Certified Business Intermediary (CBI), which is the gold standard in the business brokerage profession, and must be a member of the International Business Brokers Association.

Key Responsibilities During the Sale

A broker can help you in finding the right buyer. Listed below are their key responsibilities:

Pre-screen Potential Buyers – Brokers know which buyer can fit the required profile by assessing the capability of the buyer to make the purchase.

Guide the Seller – A broker often asks a seller of his or her skills and interests to find which industry or type of business is best to buy the company.

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Negotiate for a Fair Deal – A broker’s negotiating skills will not only keep both parties involved and focused, but also help in avoiding issues.

Being knowledgeable about the latest laws and regulatory rules, a broker is the best partner in securing licenses and permits, and making sure you get the best business deal.