WHY BUSINESS BROKING IS BROKEN
The Business Broking industry has a terrible reputation and it's well deserved
On average only 1 in 3 businesses in Australia will sell. ​
Why? Here's what your Broker may not be telling you.​
+ Brokers have too many listings
A Broken Business Broker stacks listings. They know 1 in 3 of their business will sell, so they list as many businesses as possible.
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This creates a funnel of buyers for a large pool of listings and results in low conversion rates.
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TIP: Before you engage with any Business Broker, ask them how many listings they have. More than 10 is a red flag.
+ Brokers are motivated to list, not advise
A Broken Business Broker will take a business to market as quickly as possible, without providing the right pre-sale Advice, and at the price the seller wants just to get the listing, no matter how unrealistic.
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This results in no serious enquiries over months before the seller becomes "conditioned" by the market. There is one move to make then, reducing the price.
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TIP: Find a Professional Business Broker who will conduct a thorough Pre-Sale examination of your business and provide objective substantiated advice on the Fair Market Value, Transaction Terms, Working Capital Calculations, Net Debt and Cash Adjustments and optimising Selling Costs
+ Brokers are reactive not proactive
A Broken Business Broker will list the business on standard websites and wait for enquiries to come in.
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This attracts a limited buyer pool without any deliberate control over the timing of serious buyer engagement.
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TIP: Before you engage with any Business Broker, ask them for a report showing the total number of buyer confidential agreements they collected in their last 3 recent sale campaigns showing the date of the enquiry.
+ Brokers don't communicate regularly
A Broken Business Broker will not have much to talk to you about, because they haven't generated enough buyer interest.
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They'll say things like "it's just the market", or "we only need one serious buyer"
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TIP: A Professional Business Broker will schedule fixed recurring meetings with you so you can collaborate with them during the campaign and so you receive critical advice on your operational decisions that may influence the sale.
+ Brokers don't respond to buyers promptly
A Broken Business Broker does not have adequate systems to enable them to respond to buyers quickly. Or they are just lazy. Go and enquire on 10 businesses yourself - right now! You will be shocked by how few you hear back from within 24 hours.
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Most buyers are interested in several businesses, not just yours.
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TIP: Find a Professional Business Broker that has systems to respond quickly. They work to promptly determine if your business is a fit for them by understanding the buyers commercial, finance, and personal needs.
+ Brokers present false or misleading information
A Broken Business Broker has not thoroughly analysed sufficient information on your business because they are too motivated to list your business quickly.
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This almost always results in making false or misleading representations of your business.
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TIP: Ask how many of there last 10 sales did not close after Due Diligence. A Professional Business Broker provides defendable information that reflects an honest and transparent view of your business, tailored to the lens of a buyer. This is what builds buyer confidence.