How to choose the right business broker
Since you probably are the most informed person when it comes to your business, it may seem like you are perfectly fitted to sell your business yourself. Yet, hiring a qualified business broker can be invaluable in ensuring that the transaction goes smoothly and your profits are maximized. In fact, hiring a business broker allows you to concentrate on running your business, especially at a time when you want to show your business in the best light. A business broker can take the helm at screening qualified buyers and then navigate you through any rough waters that you may encounter on the way to completing the sale. A good sales team including a business broker, your attorney, and CPA can save you countless hours of work and stress.
Plan to interview several potential brokers so that you can choose one who is well qualified, who you feel comfortable with and trust, and whose experience best fits your business and needs. The time you spend selecting the right business broker will be well worth it in the long run.
1. Check a potential broker’s credentials, track record, and client references
For example, does he or she hold a Certified Business Intermediary (CBI) from the International Business Brokers Association (IBBA)? In order to gauge a business broker’s track record, ask how many companies they sold in the past year. Additionally, in order to determine if they’ll have adequate time to dedicate to your business, inquire how many other listings they currently handle. Some brokers have a different focus, such as real estate, so it’s a good idea to make sure that the broker you choose has a history of selling businesses. Ideally, the broker you choose will have experience selling businesses within your specific industry, ensuring that he or she has the necessary knowledge and contacts to promote your business. In addition, your broker should have established good working relationships with business professionals in the community, as well as connections with accountants, lawyers, and bankers.
2. Look for a broker who listens to your needs and prioritizes your interests
When interviewing potential brokers, it’s important to keep in mind that the more comfortable you are with your broker, the easier it will be for you to communicate openly with him or her. This is essential, since you’ll need to clarify your needs and goals to him or her. You also want to feel that you can trust your broker, who will be acting on your behalf. Choosing a broker with whom you feel you can establish a good working relationship will make the sale process go much more smoothly and provide a welcome peace of mind during this transition.
A good broker will begin by going over your company’s strengths and weaknesses, as well as your specific sales goals and reasons for selling, then create a marketing strategy that fits your business and situation. Selling your business can be an emotional time, and if your broker is clear about your sales goals from the beginning, they will be better prepared to guide you through the process with an objective eye (which you may lack).
3. Find a broker with a solid sales strategy and confidentiality plan
Find out where and how a potential broker plans to market your business and how will they locate and screen potential buyers. A good broker will be able to outline their sales strategy and advertising budget for you, as well as explain how they plan to ensure your confidentiality (if that is important to you). Your broker’s sales strategy should cast a wide net, utilizing both online and offline resources to promote your business.
At the same time, you’ll also want your broker to have a good screening process to narrow the field of potential buyers down to serious prospects. This will allow you to concentrate on your business rather than spending time meeting unqualified buyers. It also protects your confidentiality, since you’ll be discussing your upcoming sale and details of your business with fewer people.
While you certainly want to hire a qualified, experienced broker who has a good track record and solid references, your peace of mind may ultimately come down to the level of comfort and trust that you have with your broker. So take the time to choose carefully, then go back to doing what you do best: managing your business.