Part 2 – Transaction Teams in Business Acquisition and Sales – Business Broker

Business intermediaries provide a number of critical services to assist buyers and sellers of privately owned companies navigate the complex acquisition and sales process. Intermediaries typically specialize within their field, similar to attorneys and accountants. The specialization might be oriented to the size of the company (main-street or middle market), a focus on a particular industry, or within a specific geographic market. When choosing an intermediary, you want to ensure that they possess the knowledge, experience, and specialized training to successfully manage all facets of the business transaction.

In addition, it will be critical that the intermediary’s core competency is in “confidential business sales”, not a Realtor who gets involved sometimes with a business sale, or an individual that performs business brokerage services “part time” or “on the side”. There are a variety of certifications, credentials, and associations available to legitimate practitioners. The International Business Brokers Association (IBBA) is the largest association and they are responsible for facilitating the CBI (Certified Business Intermediary) accreditation program.

Certified Business Intermediary’s have a number of distinct qualifications, including:

  • A higher level of education, experience (three years minimum), and training required to manage the negotiations, confidential marketing and complex issues involved in the acquisition or sale of a closely held company.
  • The most current and up to date industry information related to business valuations, deal funding, legislation, contracts, and taxes with respect to acquisitions and sales.
  • Connections and affiliations with other business brokers and professional partners (Attorney’s, Finance Companies, CPA’s, etc) on a local, regional, & national basis.

The majority of states in the US do not require any licensure of business brokers and therefore it is extremely important that both business buyers and sellers review the credentials of the individual broker as well as the brokerage firm that is being considered for representation. In many cases, a business broker will have previously owned and managed a privately held business and this expertise can be very valuable in navigating the complex issues related to the purchase and sale of a company. Those owners proactive in the strategic exit planning process who engage a business intermediary often years in advance of a planned sale, are able to control the terms and conditions that the business is sold enabling them to maximize the transaction value, mitigate taxes, and retain key employees.


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