If you are planning to sell your business, you have two general options; sell it on your own, or hire a business broker to help with the sale. Selling on your own means you keep 100% of the proceeds from the sale, but there are some challenges with this approach. 
First of all, many owners lack the time to actively market their business to potential prospects. Another potential issue is being able to objectively set a price that will accurately reflect the value of the company. Finally, business owners often do not have a wide enough network of contacts to put the business in front of the largest number of potential buyers.
For these and other reasons, working with a business intermediary is often the right option. However, it is important to choose the right person for your business sale. To help with the selection process, here are four questions to ask a business broker before hiring them:
Do You Work From Your Home or an Office: Many professionals work from a home office these days, but this is still a fair question to ask. The reason is because if the broker works from home, it could be an indication that this is not their full-time occupation. When you are selling what is likely your largest asset, it is essential that you work with an experienced professional who does this on a full-time basis.
What is Your Business Valuation Method: There are several ways to approximate the value of a business. Two of the most common are the income approach (for example, 2.5 times net annual income) and the market approach; how your business stacks up against comparable businesses within your local market. If a broker gives you a simplified generic valuation formula without knowing the specifics of your business, this may not be a good sign. Accurate business valuations are complex calculations, and the correct formula varies from industry to industry, sometimes even among specific businesses within the same industry.
How Do You Keep My Employees, Customers and Competitors from Learning the Business is For Sale: Maintaining confidentiality is very important, and in some industries, absolutely critical. Find out what procedures are in place to reach the widest network of potential buyers, without divulging specific information about the business. An experienced business intermediary will fully understand this process, and how to ensure confidentiality is preserved even as qualified candidates move further into the buying process.
How Much Experience Do You Have Listing Businesses in My Industry: As mentioned earlier, business valuation methods can vary widely by industry. This is one of several reasons to look for a business broker who has extensive experience selling businesses similar to yours. Ask if they can show you examples of past success stories, and ask how many other comparable businesses they currently have listed. If the person you are considering has never previously sold and/or currently has no businesses listed within your industry, it might be best to look at other options.
