A business broker is a person who helps in the buying and selling of business. A business broker acts just like a stock broker that helps you buy and sell shares of companies in the stock market. The business broker is like an intermediary that connects the buyer and the seller and guides them through making a favorable deal for both parties involved.
Starting a business brokerage firm requires more of knowledge and skills than capital. The skills required to become a successful business broker will be the main content of this article. By the end of this article, you should know what it takes to become a successful business broker.
5 Skills You Need to Become a Successful Business Broker
This is the first skill you need as a business broker. If you must succeed as a business broker, you must have the skill and ability to convince people to buy what you have to offer. Possessing sales skill involves making the potential buyer see what he or she stands to gain by buying your product and finally transforming the potential buyer to an eager buyer who is ready to swipe his or her credit card and make an immediate purchase.
This is another importation skill you need as a business broker. You need to know how to negotiate well, that is getting the buyer and the seller to agree on a favourable terms and prize that is acceptable for both parties.
A person’s body language sometimes speaks louder than the person’s voice. As a business good business broker, you need to know how to read a person’s body language to get any hidden message that the person is not passing across; this will help you in your negotiations.
Taking Note of Little Details
This skill has to do with taking in consideration every little detail about the seller’s business or company, his terms and conditions and the buyer’s terms. This will help you make better closure on deals, and avoid future complications.
Not every deal or negotiation will close as sales no matter how likely it may seem; knowing how to master your emotions as a business broker even when the deal is not finally closed will serve as an added advantage to your career.
How to Become a Successful Business Broker in 30 Days
1. Develop a Business Plan
You need to develop a detailed plan on how your broker business will look like. Will you work alone or will you get partners and other professionals to work with you? Will it be a one-man business or will it be a brokerage firm? What goals do you want to achieve in the first month and first year of the business? What are the steps you need to take towards achieving these goals? Answering these questions will help you develop a plan for your business.
2. Build a Portfolio of Sellers
When you are done with drawing a business plan, it is time to get business owners who want to sell off their businesses or company. It may require a whole lot of research and information to get sellers who wish to sell their business.
For starters you can start with ten or twenty portfolio of sellers and you should have at least five sellers at your disposal at any given time. If you build up a reputation as a successful business broker, business owner wishing to sell their businesses will come to you to help them find buyers.
Also, note that it is the seller that will be responsible for payment, most business brokers are paid a certain percent of the total amount the business was sold as a commission, and most times the percentage is between 5 to 15 percent. Discuss and reach an agreement on your percentage as commission with the seller right from the onset.
3. Get Professional Advice from Accountants
In as much as it is required that the seller provides you with every information you need to know about his business or company, you may require an accounting firm to carry out a background check especially on the financial strength of the company. This is to confirm that the information corresponds with the one you have because it is your responsibility to confirm the information of the company before you scout for buyers.
4. Find Buyers for the Business
It is time for you to scout for buyers for the businesses you have for sell in your portfolio. Your ideal buyer should be an investor; that is one who has enough money to invest and wiling to buy off a business that will yield profits in the future; or a company that offers similar products or services with the company you are trying to sell, who are willing to buy off similar company to expand. You can find such buyer in business directories in your location and referral option from other people in the business.
5. Negotiation Process
After you have gotten a seller and a buyer, it is time to start the negotiation process. It is left for you to fix a time when both parties will meet to begin the negotiation process. At the first negotiation meeting, you have to lay everything on the table for both parties to see.
The seller should communicate to the buyer vital information about the company including record, its financial statement and the amount he wishes to sell the company. The buyer on the other hand should communicate to the seller how much he is willing to pay for the company and also be given time to verify the information he has on the company.
Most times the negotiation process continues for a long time depending on the size of the company and how willing both parties are to reach an agreement. After the negotiation is done and the transfer or transition process starts; you as a broker get paid.
Now you know the skills required to become a successful business broker and how to become a good business broker. You do not necessarily need an office space to become a business broker but having a physical office adds value to your business image.