Anyone who has sold a business will tell you it's a huge undertaking, which is why many business owners choose to work with a professional business broker. Finding and screening potential buyers is time consuming, stressful and emotionally taxing. An experienced broker not only allows you the time to focus on running your business, but also offers their expertise throughout the entire sales process.
It all begins with a strong owner-broker relationship. This includes an understanding of what to expect from a broker and how they can best serve you. It also includes trust. After all, it's your broker's job to act on your behalf and guide you, offering not only their expertise, but also their level of objectivity. It's this relationship that will allow you to make informed decisions and ultimately close the deal.
If you're thinking about putting your business on the market, here are some tips on how to choose the right business broker:
- Check potential brokers' credentials. Inquire whether or not the broker holds a Certified Business Intermediary (CBI) certification. The certification can be from the International Business Brokers Association (IBBA) or from a state association, such as the California Business Brokers Association (CABB).
- Ask about their listings. Ask how many listings they currently have on the market and how many opportunities they listed (and sold) in previous years. This information may reveal their experience and whether or not they have adequate time to dedicate to selling your business.
- Determine the broker's specialty. Ask the broker or brokerage group if they specialize in a specific industry. It's important to make sure they have the knowledge and expertise to find the right buyers for your business.
- Ask about their professional relationships. In addition to actively finding the right buyer, it's crucial for your broker to have an established network of professional connections, such as accountants, bankers and attorneys. Also, find out if they have good relationships with business professionals in the community to support the promotion of the sale.
- Assess the broker's sales strategy. Gain clarity about where and how the broker plans to market your business and find buyers. An experienced and qualified broker should be able to provide you with a clear sales and marketing strategy. Their strategy should include both online and offline resources uniquely tailored to your business. It's also important to find out how the broker plans to handle confidentiality during the process.
The following questions should be asked when selecting your broker:
- How frequently will you contact me about the status of the sale?
- Can you provide past references?
- Are you affiliated with any business brokerage associations or trade groups?
- Can I have a sample copy of your listing agreement?
- Will you display my business on any websites?
When it comes to making your selection, in-person screenings are recommended to ensure you connect with them on a personal level. Finally, don't be afraid to ask the tough questions or request information from prospective brokers. After all, the broker that you select will ultimately have the future of your business in their hands.