Go for experienceSomeone who is an old hand will usually be a full-time broker at a reputable firm who knows the ropes. Selling a small business is not usually a task to entrust to someone with limited resources. Fortunately for you, a conversation with your potential broker will soon reveal whether they have the depth of knowledge and training required to sell your enterprise. The size of the business brokerage is another relevant factor. Don't sign up with someone who primarily deals with only their own buyers. You want someone in a network willing to work with other brokers in order to help widen the pool of buyers that have access to your deal. A further benefit of working with an experienced and networked broker is that they may well have their own huge pool of potential buyers ready and waiting to browse new opportunities.
Choose someone you want to work withClearly, it's a business arrangement, but your sale will be more easily accomplished if it is handled by someone you like and trust. If you demand high standards of integrity, you should welcome the fact that your broker sets realistic expectations, perhaps by warning you not to anticipate that you will have a sale inside three weeks, or by acknowledging your valuation and then explaining precisely why market trends warrant you having to rethink your pricing. Though experience alone is never enough, a broker who is part of a franchised network or other associations can provide an additional layer of proof of their business and ethical status.
Full time intermediary or part-time advisor? Do they co-broke?A successful broker doesn't dabble in this industry. They are not part-time advisors that do a whole host of jobs. They focus on business sales and should be happy to work collaboratively with other brokers in your area to ensure that any buyer has access to your transaction. They should also have tools, training and systems, to create a coherent marketing strategy. Make sure they are a leader in the online advertising portals. This should include:
- A full marketing plan
- Assurances and practices to keep any proposed sale confidential
- Discussions about how to vet and pre-qualify potential buyers
- A commitment to conduct price negotiations to secure the best value on your behalf
A safe pair of handsSelling your business is no time for field testing, so you'll want someone who others find dependable. Look for a business broker with solid relationships among law firms, accountants, bankers and others in the legal and financial communities. Gaining such useful referrals in your local area won't take too long, and hearing first-hand accounts will give you an important insight into the background, character and reputation of any well-connected business brokers in your neighborhood, which all helps to narrow down your search.
What's the deal?A quality business broker will be a big help in sealing the deal, but remember you are also entering a business arrangement. Most reputable brokers will charge a fee for their services (probably between 10 to 15% commission on the sale price). Many are unlikely to demand a huge upfront fee, but many a quality business broker may ask for a reasonable retainer before they begin significant work. If they ask for a huge upfront fee, beware that it may be sufficient for them not to be aligned with your goal of actually selling your business. Always look carefully at the terms and conditions of any agreement that you are asked to sign. This is the document which will govern the business end of your relationship with the broker. Check carefully for any cooling-off periods, cancellation rights, additional fees and costs, the duration of your commitment to engage the broker's services, and the obligations of each party. Sourcing the best business broker for your needs is a major step in the right direction which will help to maximize the sales potential of your business and allow you to get on with your day job — which is simply to keep your business looking like it's worth a million dollars!
By Bruce Hakutizwi, USA and International Accounts Manager for BusinessesForSale.com, the world's largest online marketplace for buying and selling small and medium size businesses. Bruce has over 7 years' experience working within the US business transfer marketplace connecting buyers and sellers.