Selecting the Right Business Broker

You’ve decided to sell your business, or perhaps you are in the market to buy one, and you’ve made the wise decision to hire a business broker to handle this transaction. But how do you choose the right one? Here’s some quick tips for making the right decision.

The Basics
Know Your Expectations -Make sure you understand your own expectations. Know what you want from the business broker.

Credentials – Check their certifications and memberships in professional organizations. Do they fulfil all the requirements for working in your state?

Specialization – Do they work frequently with businesses of the type you are selling? Are they familiar with the area? Do they have special skills or background that will help sell your business?

Prior Customers – Ask for references from other buyers or sellers they’ve handled. Contact them and ask about their experience. Would they recommend the broker?

Fair Contract – Is their contract with you fair and equitable? Are there specific clauses regarding time on the market and what happens if you part ways?

Personality
Can You Talk to Them Comfortably – Will you be able to get along with them throughout a several month long selling process? Can you be honest with them and feel they are being honest with you? Can you communicate?

They Understand They Work for You – Do they have a clear understanding that you are the principal and you are hiring them to assist you? Is it clear you are in charge and they are providing expertise and knowledge for you?

They Learn Why You Are Selling – Do they spend time finding out why you are selling your business? What your motivations are and what you expect from the sale?

Interest in Your Business – Do they find out about how your business works, who your customers are, what your situation is? Do they learn enough about your business to be able to talk to buyers about it?

The Plan
How They Will Market – Review their plan for marketing and advertising your business. Do they have sufficient budget? Will they adequately protect your confidentiality?

How They Will Screen – What is their screening process for buyers? Will they be able to filter out people who are “just looking” before you have to meet with them?

How Many Listings They Have – Do they have too many other listings to give you the appropriate attention? Do they have very few listings indicating they are not doing well? How many sales did they make last year?

Honest Pricing – Can they determine an honest price for your business from the beginning, that fits the market and does not try to match your expectations?

Where to Look
Local Referrals – Can you contact others who have bought or sold businesses and get recommendations? Doing this without announcing you are planning to sell can be difficult.

Lawyers and Accountants – Many business brokers work closely with attorneys and accountants in the process of a business sale. Talk with yours to see if they have any they would recommend.

Online Directory – Find a reliable directory for business brokers on the internet. It may be difficult to determine how reliable these sites are, so be cautious.

Chamber of Commerce – Contact your local Chamber or Economic Development Office for listings of local business brokers. This is another area where you might breach your own confidentiality, so be discreet.

International Business Brokers Association – This is a trade association for business brokers and their website provides search tools for finding brokers.

Sunbelt Business Brokers – Sunbelt is a huge network handling both buyers and sellers. Search the site for businesses or local brokers.

Don Pippin Jr, CBI CMSBB
Certified Business Intermediary