How To Find The Right Business Broker To Sell Your Business [7 Things]

Find The Right Business Broker To Sell Your Business
Selling a business is a tough process. Trying to do it alone could turn into lost time, wasted money, and utter frustration. That’s why the majority of business owners decide to hire a business broker.

This specialist can take a large load off your shoulders by studying the market, evaluating your business, looking for buyers, giving priceless advice, assisting with negotiations, and achieving the best deal.

However, before you start reaping the benefits, you need to find your ideal business broker. This may take a while. As you are searching for the perfect candidate, remember, the time you spend on the selection is an investment in the best deal.

In this article, we’ll share a few tips to help you with your search.

1. Certification

Before you hire a business broker, consider the certification.
  • A respectable candidate should have at least a bachelor’s degree in accounting or business. This is not a “must-have” but could be a wonderful addition to the person’s credentials. Such education allows business brokers to achieve better results.
  • Another thing to check is a real estate license. Even though it’s not necessary for all states, it is an excellent asset. If you have to sell property along with the business, you wouldn’t need to hire another specialist to do it. Meanwhile, the training brokers receive when getting this license improves their general skills.
  • The third and most important certification is CBI (Certified Business Intermediary). The International Business Brokers Association (IBBA) offers special courses, upon completion of which brokers get a CBI certificate. It proves their knowledge, skills, and commitment to excellence in the industry.

2. Marketing Tools

A major part of selling a business quickly is the right marketing effort. When speaking to candidates, ask about the marketing tools they use. How do they reach potential buyers? Where do they put up ads? Do they have a big following on social media? Do they know where to find the target audience online?

Cress V. Diglio share that a top-notch broker should have a clear answer about the future marketing efforts. If brokers have sold businesses similar to your successfully, they already have an approximate plan. If the broker can’t come up with any decipherable answer, you should consider another candidate.

3. Reviews And References

Since the demand for top-notch business brokers is high, many companies are offering such services. Finding the right one is becoming harder and harder. One of the simplest ways to single out a truly worthwhile candidate is to ask for referrals.

Ask around. You probably know a business owner or two who have sold their businesses in the past. Or perhaps they know someone who did. In any case, a personal recommendation is always better than something you can find online.

If you can’t find anyone to share information, you can go further to ask for references from the candidates themselves. Business brokers should be straightforward about their past clients and provide contact details so you can ask questions. Don’t hesitate to make a few calls to get a clear picture.

You can also search for reviews online. Take advantage of the IBBA broker search. All brokers you can find on that website have CBI certification.

4. Upfront Fees

When you are choosing among several candidates, it’s easy to eliminate some of them based on their fee requirements. If brokers are demanding a large fee upfront, cross them off your list.

Brokers can charge between 10% and 15% of the final deal amount. But they get paid after the deal is finalized, not before. Their payment is what stimulates brokers to do their job well. If you pay them upfront, the quality of work may suffer.

Remember, the choice of business brokers today is large. Even if the candidate seems perfect, don’t agree to pay upfront.

5. Experience In Your Niche

A broker you work with should have experience selling businesses similar to yours. A candidate with excellent references and certifications, who has focused on selling e-stores before, may not do such good of a job selling a flower shop.

Business brokers do extensive market research and have a buyer directory. If they used to work with companies drastically different from yours, all this information is useless. They would have to start from scratch, delaying the selling process.

Before you go any further checking the background, ask the broker about the experience. It can save you plenty of time.

6. Volume Of Work

Many top-rated brokers are highly demanded. If the broker is already working on several projects, you may want to go on to another candidate.

If you are considering a company rather than a specific broker, ask who will be dealing with your sale. In some cases, you may be surprised to find out that your case is delegated to junior specialists while the head broker is busy with other matters.

7. Intuition

Selling a business is not a two-day affair. It may take several months until you meet the first buyer. You would have to spend all that time working with the broker. Make sure you are comfortable around that person. If something seems off, even if the broker is an ideal candidate on paper, consider other options.

Final Thoughts

When looking for a perfect broker, don’t be afraid to spend extra time on the search. All the effort you put into finding the right candidate is an investment in an ideal sale. Check references, certifications, experience and listen to your intuition.
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