What to Look for in a Reputable Business Broker
When considering selling your business, the decision to use a business broker is one of the most important you will make. It can be challenging, however, to find the right intermediary to handle your business sale. There are questions you will want to ask and many factors to look at when you are choosing someone to help you sell what is likely to be your most valuable asset.
Here are three questions to ask a business broker you are considering working with:
Do They Have Experience Selling Businesses like Yours: Each business is different in the way it works, and therefore, has its own unique value proposition. Brokers with experience selling businesses in your industry will have the background, confidence, and expertise to handle your business sale smoothly and seamlessly. They may also be aware of recent trends that can help with the transaction, and even more importantly, marketing methods that have been successful in selling businesses similar to yours. In fact, they may even have some prospective buyers in mind that they have already formed relationships with during the course of business.
How are they Valuing your Business: Experienced business brokers will have a good eye for determining the value of a business. They will know the right questions to ask to determine a value that you will be satisfied with and will also attract qualified buyers. Years of experience with other businesses in the same industry gives brokers in-depth knowledge of the key factors that must be present for a business to receive an attractive offer. They will be able to provide the seller with invaluable advice about what needs to be done to address any weaknesses and ensure that you are fully prepared when the listing goes up.
A business valuation must be precise. If the price is too much, qualified buyers will look past it and go on to the next listing. If the price is too low, a couple things might happen. First of all, prospective buyers might assume something is wrong and decide to pass on your business rather than taking the time to perform due diligence. Alternatively, you might get an offer fairly quickly, but you will be leaving money on the table. By working with an experienced business intermediary, you will know that your business is priced appropriately.
Can They Market the Business Effectively: One of the most important things a business broker needs to be able to do is market your listing to targeted prospects without revealing the fact that your business is for sale to employees, customers, competitors, and whomever else you do not want to get wind of it. Experienced and reputable brokers have this process down to a science. They know how to reveal just enough about the business to attract strong interest without giving away too much information.
Finding a business broker to handle your sale is not always easy. There are several factors to consider, and you should be ready to ask a number of questions to determine if you will be comfortable working with them. These questions are a good starting point and they will help point you in the right direction.