Buying Or Selling A Business In Michigan
Learn some of the basics before risking any of your money.
There are a lot of details involved in buying or selling a business in Michigan or any other state. Those that take the endeavor seriously typically end up working with a professional known as a business broker. Finding out exactly what this designation means, and what it takes to become one, is where any educated potential or current business owner should start their journey.
They are minimal to say the least in Michigan, Technically, you only need to have a license to sell a business in the state of Michigan if there is real estate involved. The majority of the time, there is no real estate being sold in the transaction, so technically anyone could have handled the entire “sale” aspect to it. That does not mean you should have your father in law handle this for you, but it is better to be transparent about the requirements, or lack thereof, within the state.
In many other industries, when a professional belongs to a well regarded organization it means that they have some sort of credibility. Of course, this is applicable with business brokering as well, maybe just not to the same exact degree. Every business broker has their own way of conducting business, but many simply outright refuse to co broke for a number of reasons. This automatically eliminates them for eligibility in the International Business Brokers Association, regardless of any other qualifications that they may have. This specific non profit organization is dedicated to enhancing communication between brokers throughout Michigan, upholding ethical behavior and admirable conduct, as well as maintaining the confidentiality that is the cornerstone to success in this community.
Qualities To Look For In A Broker
Because of the sensitive nature of the information involved in a business purchase or sale, a strong attention to detail is a must. Some basic training and experience with the essentials, such as accounting practices, business valuation, and professional salesmanship, are crucial. Trust is an important factor as this individual or firm that you work with is going to eventually be given access to sensitive information about you, your business, and personal financials. Last but not least, industry specific knowledge is a major plus, although not always an absolute necessity. The basic principles of business apply regardless of what type of industry it is. However, there are none the less many nuances that only those that have worked in the field may truly understand.
Code Of Ethics
The previously mentioned Michigan Business Broker Association has outlined a few important points that are going to be recapped below. These are the building blocks that outline exactly what you should be looking for in a professional to work with:
– Knowledge of current trends, rules, & regulations
– Strong ties to and awareness of the community
– Protect against fraud and other poor conduct
– Willingness to share experience and knowledge with others
– Proper handling of confidential information
– Committed to equal representation with no discrimination
– Agree to find amicable solutions to any issues encountered
– Only offer professional advice within specific industry
– Refusal to speak poorly of other brokers