Selling your business is selling your dream. You’ve worked hard for years, putting in dedication and persistence. So finding a buyer can be an emotionally fraught undertaking. It’s also time-consuming. One option for opening access to a larger pool of potential buyers is to retain a business broker.
A business broker is a lot like a real estate agent. They’re match-makers who bring together sellers and buyers. The right broker is a valuable partner for achieving the highest possible sale price. These tips can help you find and select the right business broker for your needs and goals.
A referral from a trusted source can help you choose a broker with a documented track record of success. Ask your peers, your accountant, your lawyer, and your industry association for a list of brokers. Be sure to ask for details about their experience with specific brokers.
The International Business Brokers Association is a nonprofit trade association that offers access to more than 1,00 intermediaries around the world. It’s a great source of access to skilled professionals who have made being a broker their life’s work.
Do Your Due Diligence
A prospective buyer will undertake a lengthy due diligence process. That’s what you should do before engaging a broker. Ask pointed questions about their experience, training, background, and credentials. Have there been any lawsuits or complaints filed against them? What do online reviews and the Better Business Bureau have to say? Ask for a list of references, ideally in your type of business, and then follow up with these references.
Choose a Specialist
A part-time agent may be distracted, and might not have the necessary skill and experience to navigate complex transactions. Choose instead a broker who spends all their time selling businesses. It’s even better if you can work with a broker who specializes in your specific industry.
Have a Marketing Plan Ready
Though you’re the one hiring, a good business broker will also be interviewing you to assess how committed you are to selling your business. Be prepared to sell the broker on your business. And then, once you’ve piqued their interest, it’s time to turn the tables. Ask them about their marketing plan for your business. A skilled broker should have a clear plan for getting the deal done.
If a deal leaks out too early, you can lose supplies and key staff. Don’t unveil the deal too early. This should be a confidential matter, and your broker should be able to articulate a plan for keeping it that way.
Be Skeptical of Upfront Fees
The best brokers are confident that they can sell your company, and will earn the bulk of their money on a 10-15% commission. Buyers who demand a large upfront fee or who work on only a limited commission basis may be less motivated to get the sale done at the highest possible price.
Don’t Fall for High-Pressure Tactics
Your business broker should not pressure you into any specific decision, and should not rush you. Selling a business is complex. It takes time. You must clarify any uncertainties and feel comfortable asking questions about the process.
The right broker offers a clear and navigable path to a successful sale. Selling your business is complex, but the right team of professionals can deliver impressive results that successfully launch you into the next stage of your business career.