Buying an online business can be a daunting task, especially if it is your first time. From evaluating the business and negotiating with the seller to completing due diligence and closing the deal, there are a number of challenging steps to navigate. Given the complexity, many entrepreneurs find it helpful to work with a seller who is represented by a broker.

In this article, we first discuss what a business broker does and then cover eight reasons to buy a business that is represented by a broker. These include:

• Improved communication with the seller
• Increased professionalism
• Assistance in navigating difficult situations
• More-organized seller information
• Increased trust with the seller
• Confidence in a fair business valuation
• Confidentiality
• An easier buying process

Related Article: Four Reasons to Hire an Online Business Broker When Selling Your Business

What Is a Business Broker?

Before we jump into the specific reasons why you may want to consider buying a business represented by a broker, let’s first get an understanding of what a business broker does. In essence, a business broker, also called a business Advisor or certified business intermediary, is someone who helps people buy or sell a business.

Buying or selling a business can be a complex process. The process generally includes:

• Getting a business valuation
• Creating a marketing package
• Listing the business for sale
• Evaluating potential buyers
• Negotiating terms
• Drafting and signing a letter of intent
• Navigating due diligence
• Closing the deal

Each step along the way must be approached with care and professionalism. At any point in the process, issues could arise that could derail the deal entirely. Given the stakes, many sellers prefer working with a business broker to guide them through the exit process.

It is clear that a business broker brings a number of benefits to the business owner. But why would you, the buyer, benefit from buying a business that is represented by a professional business broker? As it turns out, there are a number of key benefits to working with an owner who is represented by a broker. We’ll explore some of these below.

“One of the main benefits of working with a seller who is represented by a business broker is that it can help improve and streamline communication.”

1. Improved Communication with the Seller

When buying an online business, your success rests heavily on the quality of your communication with the seller. From initial conversations to learn more about the business to negotiating the final deal terms, you and the seller will be in constant close communication.

If your communication is incomplete, or worse, becomes strained, the outcome of the deal will suffer. This could translate into worse deal terms, a higher purchase price, or no deal at all.

Improved communication is a major benefit of working with a seller represented by a business broker. The broker can act as the seller’s main point of contact, negotiating with you or your broker in order to share information, navigate negotiations, address concerns, and coordinate details. The broker’s professionalism and experience help in all of these aspects.

Lastly, selling a business can be a very personal process for the seller. Many sellers experience heightened or strained emotions throughout, making good communication more difficult. A broker, on the other hand, is not as personally involved as the seller. This allows them to communicate or negotiate with a cooler head, helping to move things forward constructively when the seller may otherwise get tripped up.

2. Increased Professionalism

Professional business brokers have a high level of experience. Most have navigated countless deals spanning a range of different situations. This experience and familiarity brings a level of professionalism to the process that may otherwise be lacking without a business broker involved.

The seller’s broker should communicate in a timely manner, stay respectful, and have a clear idea of which steps come next in the process. This added professionalism helps to make the transaction easier and more pleasant to navigate, both for you as well as the seller.

“Working with a seller who is represented by a broker can help you work through unexpected difficult situations more successfully.”

3. Assistance in Navigating Difficult Situations

As mentioned, buying a business can be a complex process requiring you to successfully navigate multiple crucial steps. There is a huge amount of information to take in and analyze and many important decisions to make.

Given the size of the task and the stakes at hand, it is somewhat normal for issues to arise during the process. For example, you may have signed a letter of intent only to learn that the company’s main supplier has gone out of business. Often, these issues arise out of no fault of the owner.

If or when issues arise, they can easily derail the deal if addressed improperly. Working with a seller who is represented by a broker can help you work through unexpected difficult situations more successfully. In all likelihood, the seller’s broker has dealt with a similar situation in the past.

In addition, they will be more likely to remain calm and constructive as the situation is dealt with. They will also be able to help facilitate negotiations with you and the seller as needed—negotiations that could easily become derailed in the absence of outside help.

4. More-Organized Seller Information

A good business broker will help the seller organize key information in order to create an easier selling process. This starts with creating an accurate marketing package highlighting key business information. During the actual transaction process, the broker will ensure all relevant business information is prepped and ready to go for due diligence.

It is hard to understate how much organized information can improve your experience as a buyer. Without organized information, you are left to piece together the puzzle to create a cohesive picture of the business on your own. This leaves you in the awkward position of returning to the seller time and again to request relevant information. Any worthwhile business broker will ensure that all of this information is ready to go by the time the business is listed for sale.

5. Increased Trust with the Seller

Like good communication, trust between you and the seller is crucial to achieving a successful exit. Without trust, navigating the transaction becomes extremely challenging. In a situation where much is at stake and both parties have incentives to look out for themselves, trust can be hard to come by.

Working with a seller who has an experienced and well-regarded broker can help to instill trust. In this situation, you have more peace of mind, knowing the broker is unlikely to risk reputational damage for the sake of the seller.

Of course, this doesn’t mean you shouldn’t do your own research and make your own assessments. Sometimes buyers even find it helpful to work with their own broker in order to help build trust while navigating the entire selling process.

“Like good communication, trust between you and the seller is crucial to achieving a successful exit.”

6. Confidence in a Fair Business Valuation

Many sellers are tempted to overestimate the value of their business when selling it. By doing so, they think they will be able to walk away with more money. As a buyer, it is crucial for you to have confidence that the seller’s business valuation is fair and grounded in reality.

One of the key responsibilities of a business broker is to provide an accurate and honest valuation of the seller’s business. Given their experience with such matters, a broker is well positioned to assess the fair market value of any given business. Furthermore, they don’t have the same incentives as the seller to overestimate its value.

This helps you, the buyer, have more confidence that the asking price is fair and reasonable. Of course, you should do your own assessment regardless of whether the buyer or their broker did the valuation.

“One of the key responsibilities of a business broker is to provide an accurate and honest valuation of the seller’s business.”

7. Confidentiality

Buying or selling a business can be a delicate matter. If information about the transaction were to escape, it could have negative consequences on the deal, the business, or either party. For this reason, confidentiality is key.

Having a broker involved on the seller’s side can help to instill and enforce increased confidentiality throughout the transaction process. This can help to protect the deal and instill peace of mind for you and the seller.

“Having a broker involved on the seller’s side can help to instill and enforce increased confidentiality throughout the transaction process.”

8. An Easier Buying Process

When all is said and done, buying a business from a seller who is represented by a broker can make for an easier (and more successful) buying process. Given what is at stake, it may be worth taking this into account as you identify businesses you are interested in purchasing.

Lastly, you may want to consider working with your own business broker when buying a business. Your business broker can help you identify worthwhile investments, negotiate terms, and navigate due diligence. In addition, they can draft and sign the final agreements.