Selling a business is tough. It’s not for the faint of heart. And that’s why you need to have a seasoned business broker to guide, assist, and advise you during the process.
But just how do you go about finding the right broker? In this post, we consider six questions that will help you know how to select a business broker.
1. What are the broker’s credentials?
When we talk about a broker’s credentials, we’re referring to the broker’s reputation, affiliations, memberships, and references.
Every broker you’ve shortlisted should ideally be a certified business intermediary (CBI). This is in addition to being members of important organizations such as the Alliance of Merger & Acquisition Advisors (AMAA) and the International Business Broker’s Association (IBBA).
What people think of the broker will be reflected in the references the broker provides you. They also demonstrate the broker’s capabilities and track record.
2. How experienced is the broker?
When evaluating the type of experience your potential business broker has, it’s key that you ask about their expertise in selling businesses.
A broker may indeed have an impressive number of years of experience on paper but they lack know-how about selling businesses because they only have a handful of transactions under their belt
For a better outcome, it’s recommended to go with a broker that has had numerous previous successes and that there’s a team involved in your transaction, not just one or two brokers trying to manage all aspects of a deal.
3. What services will the broker provide?
Are you looking for a full-time broker or someone to give you specific advice on any aspect of the sale? Knowing what you want from a broker will help you narrow down your selection.
Brokers offer a range of wide range of services including:
- Business valuation
- Financial recasting
- Professional business write-up
- Business marketing
- Deal structuring
- Deal negotiation
- Due diligence
It’s also worth noting that the broker’s fees will typically be calculated based on the amount of work you will need them to perform. In general, it’s wise to work with the same broker until the business has been sold off successfully.
4. How much time will the broker dedicate to your cause?
Boutique brokerage firms like Sun Acquisitions pride themselves on providing one-on-one business broker services, dedicating as much time as needed to help you in your endeavor.
Unlike large franchise firms where staff is often overwhelmed and overworked, you’ll have a dedicated team and manager that know your business inside and out.
They’ll work with you to help you strategically position your business, maximize exposure, and negotiate a favorable price.
5. How does the broker drive business value?
You want a broker who is as invested in this sale as you are.
A gold star broker is one who can identify the strengths of your business and highlight the company’s unique features in a way that will attract buyers.
They will also be able to look at the business critically and make appropriate suggestions about how the organization can be improved before it is listed.
6. What marketing mediums will the broker employ?
One of the goals of a qualified business broker is to market your business far and wide. You need to understand how exactly they plan on doing this.
You can get an idea of how well a brokerage firm takes this aspect by considering their own website as well their own business marketing materials.
They must also be on top of the latest digital marketing technologies and understand how to make the most of them. The right broker understands the need for strategic marketing and the use of a wide variety of media.
Knowing how to select a business broker can accelerate your journey and reduce the stress associated with selling a business.
By asking these questions, you can effectively narrow down your broker choices until you find the right team for your needs.
For those ready to get started and would like to talk to an experienced team of M&A brokers in Chicago, our Sun Acquisitions agents are ready to help.
Contact us today.
Looking for more insight on selling a business? Check out these links:
- Where to Sell a Business
- When to Sell a Business
- How to Sell a Business Privately?
- What Documents are Needed to Sell a Business?
- Sell NOW – The Crystal Ball is Pretty Clear
Disclaimer: Any information provided in this blog is not intended to replace legal, financial, or taxation advice given by qualified professionals.