Deciding to sell a business is among the toughest decisions a business owner will make. It’s a dilemma that is fraught with so many questions, considerations, and afterthoughts.
After all, it’s not easy to let go of something that you’ve committed your life to and have grown to love. Aside from the sentimental aspects, there are a lot of considerations to think of such as how, where and when to sell your business, how to get the best price, how to ensure smooth operations throughout the sale, and more.
Another crucial decision you’ll make is whether to hire a business broker or not. While it can be very tempting to sell a business on your own, getting the assistance of a reliable and experienced broker can help make the entire process a breeze and be able to get the best deal for your business. While there are many qualified brokers out there, not everyone offers the same level of service and expertise.
How do you choose the best business broker? What are the things to keep in mind when looking for one?
Below we take a look at the top things to consider when looking for an amazing business broker.
1. Verifiable experience
First and foremost, you want a licensed business broker with years of experience in the local market. The International Business Brokers Association can help you find a local broker in your area. To be included in the IBBA roster, a broker needs to prove a mix of training or education and years of experience.
It would also help to personally verify the information being presented by a prospective broker. Ask for contact information of previous clients and call them up.
In the world of sales, connections are a must. As such, you want to hire a broker with strong connections in the local business circle – and beyond. An ideal business broker should be a respected member of local chambers, industry organizations, and other business associations. He should have connections to legal professionals, bankers, accountants, tax specialists, CEOs and managers, capital investors, and other professionals who could play a role in selling your business.
Selling a business isn’t something a broker can do ALONE. At each stage of the process, a business broker would need the help of these professionals, so it pays to have established relationships.
3. Experience in your niche
Not all credentialed brokers are the same, especially in terms of experience. When choosing a broker, you want one who has sold a business with similar operations, transaction size, and financial conditions.
As much as possible, choose someone who specializes in your specific industry, be it food, online shop, car dealership, textile, retail, etc. Take note that each industry is unique with its own set of requirements, prospective clients, and legalities. If a business broker brags about being a generalist and capable of selling whatever business, even without verifiable sources, move on and look for another prospect.
Selling a business requires the close collaboration between the owner and buyer. In fact, Orlando based business broker, Cress V. Diglio, emphasizes the importance of open communication. You should look for a broker who is transparent, responsive, and willing to understand your goals.
You should ask about how the broker plans to communicate with you: whether it is through daily or weekly status reports. Make sure there is a clear-cut agreement on how the communication will work, such as through email, text messaging or call. You want a communication plan that meets your expectation.
5. Business sale plan
A major consideration when selecting a business broker is the business sale plan. A reliable broker should make a plan wherein the operations are not affected and confidentiality is maintained throughout the sale.
As the owner, you definitely need to know what steps to expect, the timeline for each stage, and the strategies the broker will undertake to land favorable deals. You can use their plan to compare different brokers.
6. Team player
As the owner, you have the right to direct how the sale will push through. The broker should work as a collaborator and should not be overly controlling. Choose someone who is open to bringing your team of experts (your trusted accountants, lawyers and business consultants) into the table. A good broker can work with a diverse team and be able to recognize the ideas of each one. He should be able to leverage the expertise of each team member towards a successful sale.
Finally, you want to work with someone you are compatible with. That means you want to get to know how the broker works, his attitude, character and personality traits. If a prospective broker makes you feel uneasy, trust your instinct! Find someone whom you are confident and comfortable with.