Selling your business: Business Broker vs. Real Estate Agent.
There are several differences between the two, with the first being specialized training. Both have the education required to hold a real estate license; however, the difference lies in the specialized training the business intermediary pursues after being licensed. Most Real Estate agents seek the training that will assist them in the sale of residential Real Estate. Business intermediaries, however, seek the training to assist them in the sale of commercial real estate as well as business mergers and acquisitions. This specialized training becomes very valuable while preparing your business for sale as well as within the due diligence process and closing price negotiations. Furthermore, suppose you are interested in reinvesting your money for retirement or reducing your tax burden as much as possible. In that case, most business intermediaries can recommend and introduce you to the best professionals for your specific situation.
Business intermediaries and real estate agents subscribe to different associations. Many of the associations business intermediaries join provide specific industry knowledge to assist in training as well as platforms to help market businesses and commercial properties for sale.
Quite possibly, the most important difference between the two is the network of buyers they have to work with. As a real estate agent or a business intermediary, you develop a network of people you have worked with or are currently working with. When assisting in selling a business or commercial real estate, a business intermediary will call on this network to assist in the sale. Many people who have purchased or sold businesses are looking to diversify and acquire a new business or know someone in the market.
At Creative Business Services, our business intermediaries are forward-thinking with the training to “think outside the box.” We know that times change, and the use of property dictates its value. Therefore, your property’s current use may not be the most lucrative use for the property. By taking a creative look at the property and its potential uses, we can market the property’s potential, resulting in a higher value for the property for you.
Valuations are another critical factor to consider in the sale of your business. When it comes to valuing your business, many sellers look to their broker to establish a sale price. The methods used to estimate the value of a simple piece of real estate are much different from the methods used to develop the value of a business. A business valuation requires specialized training and the use of valuation software that may not be available to a real estate agent.
Assessing the proper value for a property is a crucial factor in achieving an effective sale. If the property is undervalued, you will lose money. If the property is overpriced, it will not sell because the price does not equal its value.
The commission rate you pay may differ between a business intermediary and a real estate agent. You will often pay a higher commission rate for a specialized business intermediary; however, business intermediaries have the expertise to sell your business faster, and most importantly, at a higher price. In short, a business intermediary has the expertise, tools, and network to guide the sale of your business from start to finish.
To learn more about the details included in preparing, listing, and selling your business, contact Travis Wesche of Creative Business Services.