A business broker can be a huge asset to anyone trying to sell their business because a good broker brings experience and expertise to the table. They are trusted advisers who can help sellers navigate valuation, marketing, prospecting, negotiations and other fundamental elements of a sale. Essentially, they help make your small business more saleable.
But you don’t want to entrust the sale of your company to just anyone. The relationship between a business broker and seller is more than just a business arrangement; it’s a partnership. Whether you are choosing a new broker or evaluating the job your current broker is doing, here are five things you should expect from your business broker:
The right business broker for your sale should have a track record of success in your industry. If the candidate’s success lies in another area, he or she may not have the contacts or information needed to negotiate the successful sale of your business.
Not every state regulates business brokers so certifications and licensing credentials may not always apply, but many voluntarily belong to organizations. Look for brokers endorsed by the International Business Brokers Association (IBBA) or other state broker associations. Someone who has achieved the IBBA’s CBI (Certified Business Intermediary) designation meets the educational and ethical standards of the group.
General Interest in Your Business
A good broker will take the time to learn your goals and expectations of the sale so that they can negotiate a deal that accomplishes them. Look for someone who wants to learn as much about your business as they can right from the beginning. By having insights into your company, the broker will be better able to market your business to potential prospects. They should listen to what you have to say, but also be honest with you throughout the sale process.
A good broker should always represent your interests over those of the buyer. Be wary of anyone who seems more interested in selling their own valuation services than selling your company.
Expect to hear a solid strategy for the sale of your business from a broker. This should including advertising and marketing your sale to potential buyers as well as what they will do to maintain confidentiality. This is important because privacy helps the seller control the timing and how the announcement of the sale is handled with employees and customers.
Marketing your sale online is a good first step. But a decent broker will incorporate both online and offline tactics. He or she should be well connected in your community and have strong relationships with accountants, lawyers, bankers and other business professionals. It’s important for a business broker to be respected by his peers.
It is okay to ask about the amount of listings a business broker is currently handling. If that list is small, it could be a sign of lack of motivation or experience. On the other hand, if that list is too large, there could be the possibility that your sale may not get the attention it deserves. It’s standard for business brokers to carry 15-20 business listings at any given time. Check the broker’s record to see how many companies he or she sold last year as a good way to gauge selling abilities.
It’s essential that you be able to communicate openly and honestly with your business broker. Be clear in your expectations for communication, including how often and through what method (phone, email, in person, etc.) you prefer. You should always be able to get a response to a question in a reasonable amount of time.
BusinessesForSale.com is the market-leading directory of business opportunities from Dynamis, the online media group also behind FranchiseSales.com and PropertySales.com. Follow them on Twitter @BizForSaleUS
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