Buying or selling a small or medium-sized business that is privately owned, works more efficiently when business brokers are involved. In practice, the process is more effective when a broker acts as an intermediary. Although history suggests that business brokers in Santa Clara County, CA, work for the seller, they can, by law, represent either the buyer or the seller during a sale, but not both.
Within some states in the US, the same business broker company can work for both sides during a sale, but individual business brokers must be committed to their individual party. The business brokers, as a company, must have full agreement from both parties if they are to represent both sides of the same deal.
California is one of 17 states that require business brokers to be licensed, which is carried out by the states’ Real Estate Regulatory Agency.
Which Areas of a Sale Can the Broker Help With?
Despite the involvement of this outside intermediary, the sale can continue to remain confidential throughout the entire process. Business brokers can work with company mergers, acquisitions and wherever privately held companies require a confidential valuation, before deciding about whether to sell or merge with another company.
They are not real estate agents, but it helps if you understand how real estate agents complete a sale by offering a wide range of services associated to completing the deal as the brokers work in a similar manner.
What Does a Business Broker’s Job Description Look Like?
In the beginning, they are required to value the business professionally, so that it is priced competently, to encourage a sale for the right price.
Just as the real estate agent forms a brochure of a property, business brokers will provide a confidential business review. Once a potential purchaser has signed a confidentiality agreement, they will be able to access the business review to address the viability of the business.
The broker is charged with marketing the business to encourage the best possible sale and then introduce potential purchasers after arranging meetings between the two parties.
After agreeing detailed offers in writing, negotiations between the parties will be handled by the broker. Once your purchase has been agreed, the business brokers in Santa Clare, CA, will encourage a period of due diligence to ensure that all the data is correct and in place.
The broker may be required to arrange finance for the acquisition and will be involved until the transaction is closed.
Choosing the most appropriate business broker when you wish to buy or sell a business is an important decision for any organization and you should seek advice from people you trust for high quality recommendations.
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