Let’s face it, there are hundreds of business brokers to choose from. Selecting the right one with the right skill sets and expertise can mean the difference between your business being on the market for years or selling right away and meeting your asking price. There is no sure way to guarantee this, but we can offer you a few tips that will point you in the right direction.
- Don’t just choose any broker. Shop around and interview at least 5-10 business brokers. Not all business brokers are the same and it is important to find one that has experience selling or a good understanding of the type of business that you are trying to sell.
- Find out their strategies or marketing plan. Business brokers will use similar strategies when selling your business however there are variations. Not all businesses are the same, so find a broker with an effective strategy for selling your specific type of business.
- Referrals are helpful. If you know someone who has experience using a business broker, it doesn’t hurt to find out about their experience. Perhaps a friend or a professional acquaintance may know of an excellent broker.
- Find Business Broker Association Members. Search through business broker associations or find a broker who is a member of an association. Find out what it means to be part of that association. If you find a broker who isn’t a member of any professional associations, find out why.
- Do your research. So you think you’ve found the right broker? Great! Just to be sure that they didn’t just ‘wow’ you with their gift of gab, check them out online and make sure there are no complaints or problems with their service. More and more people are searching online to fact check about people and businesses through groups like the BBB or online review and forum sites, so make sure that they have been doing a good job. Be aware of your broker’s background, experience, and credentials.
- Find a specialized broker. For example, if you are selling a retail location, it might be a good idea to find a broker who specializes in retail sales. Chances are he may have a developped contact base for this and will not put much emphasis on other types of business sales, although they will likely be willing to take your business on, regardless.
- Make sure that your broker understands confidentiality. The knowledge that your business is being sold can often cause uncertainty for your employees; they may not feel confident that they will have a position once the business is sold and this may affect morale. Also your customers and suppliers may also have concerns, so be sure that your broker doesn’t blatantly flaunt the fact that he is selling your business if it could be damaging.
- Avoid upfront fees. Like a real estate agent, a broker takes a percentage of the sale price of the business. This will usually range from 8-15%. If the broker is requesting upfront fees, it shows a lack of confidence in their ability to sell the business.
- Don’t be pressured. As a seller of a business, a broker should not apply pressure to you. They should not force you to make an immediate decision; however, if they feel they may already have a potential buyer, they will likely mention this. Chances are if that buyer is serious, they should be able to find your business for sale no matter which broker you go with, provided they have done their diligence.
- Test their negotiation skills. Once you feel you have found the right broker to help you sell your business, why not test them out? See how they react when you try to negotiate their rate. There is no harm in trying and if they are very stern and good at justifying this expense, chances are they will negotiate the same stance for your business.
- Can you get in touch with them? If your broker is hard for you to reach, it may be the same for potential buyers. The busiest broker may be great, but don’t be a small fish in his pond.
From all of us here at Bizcocity, we wish you the best of luck selling your business.