If you are selling your business in Dallas, then you may have been told (or read about) the importance of working with a business broker. Anytime a business owner brings someone else from outside the company into the fold, it can cause soe legitimate questions and concerns about the involved risks.
In this review, we seek to address some of the more common misconceptions and myths about working with a Dallas business broker. This should help you make more informed decisions and address some of the concerns you may have about hiring a broker.
#1: I Don’t Need a Dallas Business Broker
Let us start with the most common (and most detrimental) myth. The fact is you do need a business broker if you want to sell your business for fair market value in Dallas or the surrounding area. Technically, you can try and legally sell on your own, it is not that simple.
A business sale is unlike selling real estate or any form of product or service. With mergers and acquisitions, you are selling your business in a confidential manner. It is nearly impossible to sell your company confidentially on your own. Additionally, a business broker understands how to find qualified buyers and justify your asking price withthem. This helps you avoid selling for under market value or not selling at all if your asking price cannot be justified with a professional valuation.
#2: My Broker Doesn’t Need a Real Estate License in Dallas
This one is partially false. It is true that business brokers in Texas are not required to have a real estate license. However, since many (if not most) business sales include real estate in the transaction, a real estate professional is needed to help facilitate the deal and satisfy legal requirements.
Otherwise, you may set yourself up for lawsuits later on if there are disputes related to the real estate property (or properties). Therefore, although your Dallas business broker does not technically need a real estate license, you should ensure your broker either has one or works with a real estate broker during the sale.
#3: Dallas Business Brokers Require High Upfront Fees
Although there are some Dallas business brokers who charge upfront fees for their services, we do not recommend working with them. In far too many cases, upfront fees are a scam. They take away the incentive for the broker to find a buyer for maximum value in a timely manner. The good news is there are many business brokers in Dallas who only charge success fees, also called commission fees with no upfront cost commitments. This means you only pay for their services after they find a qualified buyer and the sale closes.
#4: Dallas Business Brokers Only Help With Certain Parts of The Sale
There is a difference between a full-service business broker and a limited-service business broker. As the titles imply, a full-service Dallas business broker is there to assist you throughout the sales journey. Notably, the services they provide include:
- Professional valuation
- Exit strategy planning
- Non-disclosure agreements
- Drafting CIMs and video interviews
- Buyer search
- Due diligence assistance
- Closing assistance
- Business transfer and training assistance
You should make sure to choose a broker who is there to help you throughout the process. However, so long as you choose the right broker, they should be there with you every step of the way, offering consulting services in addition to actively seeking a buyer and facilitating a deal.
#5: I Cannot Trust a Dallas Business Broker to Maintain Confidentiality
As you may know, it is of the utmost importance to maintain confidentiality when you sell your business in Dallas. Many business owners fear that their broker will not be able to keep the sale private, and sale publicity could cause panic among employees, suppliers, and customers, which subsequently leads to disruptions in business operations and profitably.
Although this may be a legitimate concern with some less experienced and less proven business brokers, an experienced Dallas business broker can ensure the sale remains confidential until a deal is finalized. The business broker can utilize various methods to ensure the public does not find out. Specifically, they may use non-disclosure agreements (NDAs), and confidential information memorandums (CIM) in which certain aspects of the company (i.e. the company name and precise location within the Dallas area) are kept private.
Are You Ready to Sell Your Business in Dallas?
Sima Mergers and Acquisitions helps Dallas business owners sell their company in an easy and stress-free manner. More importantly, we help you maximize your sale price and reach your other (non-financial) sales goals. Contact us today for a free market-based business valuation.
Sigma Mergers & Acquisitions sells businesses valued between $1 million and $100 million. We have helped sell 600+ businesses over the past 20 years. We charge NO upfront fees ever, and you pay us only when we sell your business for a price that meets YOUR goals.