Working with a dedicated business broker versus a generalist delivers better outcomes for both buyers and sellers while also bringing more value in many ways, including:
\r\nAn in-depth knowledge of their market, allowing dedicated brokers to accurately value your business and provide buyers with critical information about the business model.
\r\nA built-in customer base and knowing who your ideal buyer is and how to find them.
\r\nSpecialized vendor networks and connections with the right attorneys, contractors, and lenders in your industry.
\r\nSo you've decided to sell your business. You're not alone. According to BizBuySell’s annual insight report, 9,746 closed sales were reported by business brokers operating through their platform in 2019. While the online marketplace for available businesses says this number represents a 5.5% decrease from closings reported in 2018, these are still impressive numbers because closings for 2018 topped BizBuySell’s historical records — indicating that more and more business owners are electing to change course. You might be considering doing the same.
\r\nMaybe it's time to retire. Or, perhaps you want to move on to other ventures. Either way, you need to turn all those years of blood, sweat, and tears into some cash you can put in your pocket. Unfortunately, selling a business isn't like selling your car. You can't post your business on Craigslist, take a few calls, and then haggle with someone in your driveway over the final sale price. It's much more complicated than that.
\r\nUnlike cars or houses, which are priced by the broader consumer market, there are many different ways to value a business. Not to mention factors like cash-flow, profit margins, depreciation, debt, and a dozen other considerations that could transform a seemingly profitable business into a money pit. This is why many business owners turn to business brokers for help. Not only can they help expedite a sale for possibly more profit, but they also allow the business owner time to focus on their own businesses while they handle the nitty-gritty details of the transaction or what comes before that during the marketing process.
\r\nHowever, with 11,411 business brokers to choose from in the U.S., simply knowing where to go can be overwhelming. And, the options will only continue to broaden since this statistic from IBISWorld was paired with the statement that the business brokerage industry saw an average growth of 2.4% from 2014 to 2019.
\r\nA key way to narrow down the widening pool of options is to seek out brokers who specialize in your specific industry. Before examining the key differentiators of specialized brokers, let’s first examine the generalist’s role to better understand the business brokerage industry overall.
\r\nFor years I worked as a general business broker, helping people buy and sell dozens of different types of businesses. One month I might be selling a software company, the next month a restaurant chain and the month after that a manufacturing company. As a result, my business was very wide, but not very deep. Every time a new client walked in my door, I made another dive into a new industry as I attempted to learn as much as possible.
\r\nThis learning curve had a significant impact as I worked to determine a business's profitability. Sales often get held up in due-diligence as the two sides work towards an agreed-upon set of financials. Whenever I worked within a new industry, I'd have to rediscover what is normal, abnormal, and exceptional to set an accurate value on a business. This slowed the process down tremendously and limited my ability to increase my own transaction volume.
\r\nThese factors all combine to make general business brokering a complicated, time-consuming process. However, this all changed for me in 2012 when a new opportunity prompted me to specialize exclusively in brokering FedEx routes.
Now that I've had the opportunity to work as both a general and dedicated business broker, I see the value that comes with specialization.
\r\nDedicated business brokers are specialists who develop an in-depth knowledge of their market. That makes it easier for dedicated brokers to value a business accurately — which speeds transactions — and allows them to provide buyers with critical information about the business model they'd like to buy into. Using a dedicated business broker in your industry will give you a level of expertise that generalist brokers simply don’t have — and can’t obtain — without specialization.
\r\nThere's a perfect buyer for every business. However, finding them is sometimes challenging. When you're a general business broker, you're continually looking for a new group of buyers to fit whatever business you're selling at the time. Dedicated brokers work differently. They know the ideal buyer and how to find them. As a result, they can navigate the sales cycle much quicker — allowing both the buyer and the seller to get back to their lives sooner.
\r\nEvery industry has its unique quirks. For instance, when buyers are interested in purchasing a FedEx route, there aren’t many tangible assets banks can look at to justify the loan amount. This situation, which doesn't exist in other industries, requires a lot of lender goodwill. Fortunately, I've developed relationships with lenders who understand the business and are comfortable working with qualified buyers. General brokers won’t always understand industry-specific nuances and lack connections with the right vendors like attorneys, contractors, lenders, or other professionals that can help close a sale.
\r\nDedicated brokers are also able to deliver added value in ways that aren't easily quantifiable. As one example, I've invested tens of thousands of dollars to rank near the top of Google's first page for search terms that will only benefit a specific group of buyers and sellers. Only specialized business brokers are able to invest the money and time necessary to better serve their clients within any given industry. Due to the nature of generalists, going the extra mile and building out systems is just not possible. So, in many cases, would-be buyers and sellers are on their own to secure financing and navigate each industry's challenges.
\r\nWhile I was an excellent general business broker, my results exploded when I decided to specialize. This experience convinced me that specialization delivers better outcomes for both buyers and sellers, while also fueling improved results for brokers. So if you're selling a business, my advice is to seek out brokers with in-depth knowledge of your industry. They'll provide more accurate valuations and possess knowledge and skills you might not know you need.
\r\nIf you're wondering where to find these experts, the first place to start looking might be the easiest place to begin — among the industry connections you've undoubtedly worked hard to maintain as you’ve built your business. Ask your peers for referrals. Seek out those who've sold similar businesses to yours and ask if they were happy with the sale process and inquire about who they used to broker it. You might be surprised by the extra nuggets of advice you glean along this discovery process. If your referral network doesn’t turn anything up, a quick search on BizBuySell under your industry might bring you some direction. And don't forget about the powers of our handy friends — Google and LinkedIn. Active brokers in your industry should be utilizing those platforms to show up for search terms related to your industry.
\r\nAnd, if you are on the other side of the transaction working as a business broker, I strongly recommend looking for industries in which you can build your expertise. By leveraging the right opportunity, you could transform your career in the same way I did.
\r\n\n","docType":"article","guid":"articles_6c8e94fef82be4e8583490c320a058b1","lastModified":"2020-03-16T02:00:00.000Z","published":"2020-03-16T02:00:00.000Z","structuredData":null,"subtitle":"If you are looking to sell your business, you are best served by hiring a dedicated business broker.","template":"v1","title":"How Dedicated Business Brokers Get Better Results","type":"article","author":{"avatar":null,"bio":"Before launching KR Capital, I worked as a general business broker for six years, helping people buy and sell a variety of different businesses — from software companies and restaurant chains to manufacturing outfits and more. When eCommerce took a foothold, I found a niche in transportation/delivery and decided to focus exclusively on the sale of FedEx routes with the launch of KR Capital in 2013. Today, I consult with hundreds of owners/operators of FedEx routes (many people do not know these routes are independently owned) who are looking to value, prepare and sell their routes to external buyers. To date, our firm has successfully negotiated the sale of hundreds of FedEx routes nationally with over $150 million in transaction value.\r\n\r\nLearn more about KR Capital here: https://www.deliveryroutesforsale.com","name":"Kyle Rohner","image":null,"slug":null,"social":{"facebook":"","linkedin":"https://www.linkedin.com/in/kyle-rohner-6379b76/","twitter":"https://twitter.com/krcapitalllc","website":"https://www.deliveryroutesforsale.com"},"status":"enabled","title":null,"type":"New BDC Member","user":{"imagePath":"https://staging.business.com/images/uploads/user/profile/4b76e5002d5aa276aed221fd47e20f1a22031.jpg","profile":{"company":"KR Capital LLC","jobTitle":"Founder and Principal","website":"https://www.deliveryroutesforsale.com"}}},"breadcrumbs":null,"channels":{"primary":{"name":"Business Basics","slug":"business-basics"},"sub":{"name":"Business Solutions","slug":"business-solutions"}},"meta":{"robots":"index, follow","description":"Dedicated business brokers deliver better outcomes for buyers and sellers, including bringing more value to the transaction and fueling improved results.","title":"Why You Need a Dedicated Business Broker - business.com"},"parsedContent":{"toc":[{"id":"deeper-knowledge","title":"Deeper knowledge"},{"id":"a-built-in-customer-base","title":"A built-in customer base"},{"id":"specialized-vendor-networks","title":"Specialized vendor networks"},{"id":"the-extra-10percent","title":"The extra 10%"}],"json":[{"component":"p","children":["Working with a dedicated business broker versus a generalist delivers better outcomes for both buyers and sellers while also bringing more value in many ways, including: "]},{"component":"ul","children":[{"component":"li","children":[{"component":"p","children":["An in-depth knowledge of their market, allowing dedicated brokers to accurately value your business and provide buyers with critical information about the business model. "]}]},{"component":"li","children":[{"component":"p","children":["A built-in customer base and knowing who your ideal buyer is and how to find them. "]}]},{"component":"li","children":[{"component":"p","children":["Specialized vendor networks and connections with the right attorneys, contractors, and lenders in your industry. "]}]}]},{"component":"p","children":["So you've decided to sell your business. You're not alone. According to BizBuySell’s ",{"component":"a","props":{"href":"https://www.bizbuysell.com/insight-report/","target":"_blank","rel":"nofollow"},"children":["annual insight report"]},", 9,746 closed sales were reported by business brokers operating through their platform in 2019. While the online marketplace for available businesses says this number represents a 5.5% decrease from closings reported in 2018, these are still impressive numbers because closings for 2018 topped BizBuySell’s historical records — indicating that more and more business owners are electing to change course. You might be considering doing the same."]},{"component":"p","children":["Maybe it's time to retire. Or, perhaps you want to move on to other ventures. Either way, you need to turn all those years of blood, sweat, and tears into some cash you can put in your pocket. Unfortunately, selling a business isn't like selling your car. You can't post your business on Craigslist, take a few calls, and then haggle with someone in your driveway over the final sale price. It's much more complicated than that. "]},{"component":"p","children":["Unlike cars or houses, which are priced by the broader consumer market, there are many different ways to value a business. Not to mention factors like cash-flow, profit margins, depreciation, debt, and a dozen other considerations that could transform a seemingly profitable business into a money pit. This is why many business owners turn to business brokers for help. Not only can they help expedite a sale for possibly more profit, but they also allow the business owner time to focus on their own businesses while they handle the nitty-gritty details of the transaction or what comes before that during the marketing process. "]},{"component":"p","children":["However, with 11,411 business brokers to choose from in the U.S., simply knowing where to go can be overwhelming. And, the options will only continue to broaden since this ",{"component":"a","props":{"href":"https://www.ibisworld.com/united-states/market-research-reports/business-brokers-industry/","target":"_blank","rel":"nofollow"},"children":["statistic from IBISWorld "]},"was paired with the statement that the business brokerage industry saw an average growth of 2.4% from 2014 to 2019. "]},{"component":"p","children":["A key way to narrow down the widening pool of options is to seek out brokers who specialize in your specific industry. Before examining the key differentiators of specialized brokers, let’s first examine the generalist’s role to better understand the business brokerage industry overall. "]},{"component":"p","children":["For years I worked as a general business broker, helping people buy and sell dozens of different types of businesses. One month I might be selling a software company, the next month a restaurant chain and the month after that a manufacturing company. As a result, my business was very wide, but not very deep. Every time a new client walked in my door, I made another dive into a new industry as I attempted to learn as much as possible. "]},{"component":"p","children":["This learning curve had a significant impact as I worked to determine a business's profitability. Sales often get held up in due-diligence as the two sides work towards an agreed-upon set of financials. Whenever I worked within a new industry, I'd have to rediscover what is normal, abnormal, and exceptional to set an accurate value on a business. This slowed the process down tremendously and limited my ability to increase my own transaction volume. "]},{"component":"p","children":["These factors all combine to make general business brokering a complicated, time-consuming process. However, this all changed for me in 2012 when a new opportunity prompted me to ",{"component":"a","props":{"href":"https://www.deliveryroutesforsale.com/","rel":"nofollow"},"children":["specialize exclusively in brokering FedEx routes"]},". ",{"component":"strong","children":[{"component":"br"}]}," "]},{"component":"p","children":["Now that I've had the opportunity to work as both a general and dedicated business broker, I see the value that comes with specialization. "]},{"component":"h2","props":{"id":"deeper-knowledge"},"children":["Deeper knowledge"]},{"component":"p","children":["Dedicated business brokers are specialists who develop an in-depth knowledge of their market. That makes it easier for dedicated brokers to value a business accurately — which speeds transactions — and allows them to provide buyers with critical information about the business model they'd like to buy into. Using a dedicated business broker in your industry will give you a level of expertise that generalist brokers simply don’t have — and can’t obtain — without specialization. "]},{"component":"h2","props":{"id":"a-built-in-customer-base"},"children":["A built-in customer base"]},{"component":"p","children":["There's a perfect buyer for every business. However, finding them is sometimes challenging. When you're a general business broker, you're continually looking for a new group of buyers to fit whatever business you're selling at the time. Dedicated brokers work differently. They know the ideal buyer and how to find them. As a result, they can navigate the sales cycle much quicker — allowing both the buyer and the seller to get back to their lives sooner. "]},{"component":"h2","props":{"id":"specialized-vendor-networks"},"children":["Specialized vendor networks"]},{"component":"p","children":["Every industry has its unique quirks. For instance, when buyers are interested in purchasing a FedEx route, there aren’t many tangible assets banks can look at to justify the loan amount. This situation, which doesn't exist in other industries, requires a lot of lender goodwill. Fortunately, I've developed relationships with lenders who understand the business and are comfortable working with qualified buyers. General brokers won’t always understand industry-specific nuances and lack connections with the right vendors like attorneys, contractors, lenders, or other professionals that can help close a sale."]},{"component":"h2","props":{"id":"the-extra-10percent"},"children":["The extra 10%"]},{"component":"p","children":["Dedicated brokers are also able to deliver added value in ways that aren't easily quantifiable. As one example, I've invested tens of thousands of dollars to rank near the top of Google's first page for search terms that will only benefit a specific group of buyers and sellers. Only specialized business brokers are able to invest the money and time necessary to better serve their clients within any given industry. Due to the nature of generalists, going the extra mile and building out systems is just not possible. So, in many cases, would-be buyers and sellers are on their own to secure financing and navigate each industry's challenges. "]},{"component":"p","children":["While I was an excellent general business broker, my results exploded when I decided to specialize. This experience convinced me that specialization delivers better outcomes for both buyers and sellers, while also fueling improved results for brokers. So if you're selling a business, my advice is to seek out brokers with in-depth knowledge of your industry. They'll provide more accurate valuations and possess knowledge and skills you might not know you need. "]},{"component":"p","children":["If you're wondering where to find these experts, the first place to start looking might be the easiest place to begin — among the industry connections you've undoubtedly worked hard to maintain as you’ve built your business. Ask your peers for referrals. Seek out those who've sold similar businesses to yours and ask if they were happy with the sale process and inquire about who they used to broker it. You might be surprised by the extra nuggets of advice you glean along this discovery process. If your referral network doesn’t turn anything up, a quick search on BizBuySell under your industry might bring you some direction. And don't forget about the powers of our handy friends — Google and LinkedIn. Active brokers in your industry should be utilizing those platforms to show up for search terms related to your industry. "]},{"component":"p","children":["And, if you are on the other side of the transaction working as a business broker, I strongly recommend looking for industries in which you can build your expertise. By leveraging the right opportunity, you could transform your career in the same way I did."]},{"component":"p","children":[" "]}]},"resource":null,"sponsorship":{"sponsorType":"","name":null,"thumbnail":null,"bio":null,"slug":null,"status":null,"social":{"website":null,"linkedin":null,"twitter":null,"facebook":null}},"thumbnail":{"path":"https://staging.business.com/images/content/5e6/eb8265a215ee00f8b4573/1500-0-","caption":"undefined undefined/Getty Images","isBlurred":false},"bestPicks":null},"related":{"relatedArticles":[{"title":"Talking Shop: How to Build a Sustainable Digital Media Company","canonical":"https://www.business.com/articles/building-successful-digital-media-company/","slug":"building-successful-digital-media-company","thumbnail":"https://www.business.com/images/content/5cf/02b677b4374386a8b457c/1500-0-","dek":"Find out how business.com's CEO approaches the digital media industry.","lastModified":"2019-06-04T13:00:00Z","published":"2019-06-04T13:00:00Z","sponsored":false},{"title":"Moving to E-Commerce: What You Need to Know","canonical":"https://www.business.com/articles/moving-to-e-commerce/","slug":"moving-to-e-commerce","thumbnail":"https://www.business.com/images/content/5f3/aa2665a215ecf4a8b4567/1500-0-","dek":"Between social distancing, economic variability and state closures, many businesses are increasingly turning to e-commerce as a way to stay afloat.","lastModified":"2020-08-17T16:27:00Z","published":"2020-08-17T16:27:00Z","sponsored":false},{"title":"SBA Loan Default: A Complete Guide for 2020 and Beyond","canonical":"https://www.business.com/articles/sba-loan-default-guide/","slug":"sba-loan-default-guide","thumbnail":"https://www.business.com/images/content/5dc/047af7b437483068b4572/1500-0-","dek":"Here's comprehensive guide to all your questions about SBA loan default, forgiveness and the SBA Offer In Compromise.","lastModified":"2019-11-04T15:00:00Z","published":"2019-11-04T15:00:00Z","sponsored":false},{"title":"What E-Commerce Retailers Need to Know About COVID-19's Impact on Business","canonical":"https://www.business.com/articles/corona-virus-impact-on-ecommerce-retailers/","slug":"corona-virus-impact-on-ecommerce-retailers","thumbnail":"https://www.business.com/images/content/5eb/45a825a215e003f8b4572/1500-0-","dek":"What are the affects and influences of the Coronavirus outbreak on eCommerce businesses?","lastModified":"2020-05-07T23:13:00Z","published":"2020-05-07T23:13:00Z","sponsored":false},{"title":"10 Steps to Take Before Selling Your Business","canonical":"https://www.business.com/articles/sell-your-company-steps/","slug":"sell-your-company-steps","thumbnail":"https://www.business.com/images/content/5dd/31d629c658a9a148b4585/1500-0-","dek":"Follow these steps to make sure you get the most out of your business sale.","lastModified":"2019-11-20T14:00:00Z","published":"2019-11-20T14:00:00Z","sponsored":false},{"title":"Small Business Survival Guide: How to Sustain Cash Flow During a Government Shutdown","canonical":"https://www.business.com/articles/government-shutdown-small-business-survival-guide/","slug":"government-shutdown-small-business-survival-guide","thumbnail":"https://www.business.com/images/content/5c3/cfc2b7b437401408b4568/1500-0-","dek":"Here's how to overcome the cash flow challenges associated with the current shutdown.","lastModified":"2019-01-14T16:00:00Z","published":"2019-01-14T16:00:00Z","sponsored":false},{"title":"5 Tips for Finding the Right Manufacturer","canonical":"https://www.business.com/articles/find-the-right-manufacturer/","slug":"find-the-right-manufacturer","thumbnail":"https://www.business.com/images/content/5dd/d7c4f5a215e316d8b456d/1500-0-","dek":"Learn how to choose a manufacturing partner for your e-commerce business.","lastModified":"2019-11-27T16:00:00Z","published":"2019-11-27T16:00:00Z","sponsored":false},{"title":"SBA Loan Default? 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