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7 Tips on Picking the Best Business Broker

Posted on November 30, 2019 in Uncategorized

Thinking of selling your small business? Are you one of those fearless entrepreneurs who think they can market, negotiate and close a deal by themselves or are you going to take the more logical route of working with a business broker? If sanity prevails and you are going to work with a pro, here are a few things to look for to find the best business broker.

1. Get recent references

Ignore all the hype a brokerage firm places in their literature and ask for recent references and then follow up and actually check them out. If you’re dealing with a larger business brokerage, get references from the broker you will be working with. Big offices will always have rookies and you want to insure that the broker you get knows his or her stuff.

2. Work with certified brokers

Many states require that business brokers hold a real estate license but just having that license does not mean that the broker necessarily knows anything about buying or selling a business. In fact a number of realtors turn “business brokers” when the real estate market gets slow. What you should be looking for is certification from the International Business Brokers Association who grants a certificate as Certified Business Intermediary (CBI) after completion of an extensive educational course.

3. Don’t be fooled

If the reason that you are considering selling is because you received a letter or email from a broker with the message “We have a buyer for you” then think again. This is one of the most common marketing ploys used in this business. Without question these brokers probably have people interested in buying a business but not necessarily yours.

4. Don’t rush to a decision

Selling your business is a big deal and one you want to be sure you do right. In your conversation with brokers ask them if now is a good time to sell. Ask for an opinion of value. Coming up with this could take a bit of time and if the broker is reputable, he or she may advise you not to put the business on the market but rather make suggestions on what to do to improve the value. A broker who makes this suggestion is looking to make both of you a bigger buck by making the business more attractive.

5. Pick a brokerage with experience in your industry

Look at current listings that the broker has. Check out both the size and types of industries to insure that he or she has experience in your market place. Again, don’t rely on marketing material find out the facts yourself.

6. How does the broker market

Ask what the broker’s marketing plans are and ask to see samples. If he simply puts an ad in the paper or posts it to a single website you probably aren’t getting the exposure you deserve. Good brokers have networks they can tap to find interested and qualified buyers.

7. Avoid packaged services

At some point in the sales process you are going to need the services of an attorney and a qualified accountant. Your broker will probably offer those services but in most cases what he or she is doing is outsourcing to someone else. If you have your own attorney and CPA just stick with them. Otherwise it may be less expensive to find and deal direct with those professionals rather than getting them through the broker.

Finding the best business broker isn’t really that difficult it simply requires some time and effort on your part. However, getting the best broker makes a huge difference in how the experience plays out and the total value of the deal.

7 Tips For Selecting the Best Small Business Brokers to Sell Your Business

Posted on November 29, 2019 in Uncategorized

Are you thinking about selling your business? Have you ever gone through the process before? Are you confidant that you can do it yourself? Where would your time be better spent, running your business at peak performance while trying to sell it, or focused on the advertising campaign, networking, negotiating, and coordinating the closure of the sale of your business? Maybe you should consider doing what you do best, running the business, and search out small business brokers and let them do what they do best, sell businesses. If you go that route, here are 7 tips to choosing a business broker that makes sense for you.

1. Don’t get lost in the shuffle

You want your broker to have a proven record and a great reputation but you don’t want the organization to be so big that your deal is passed off to a junior staffer. You want the active involvement of the principals.

2. Do your due diligence

You’re about to engage the services of someone that is going to have a big impact on your financial life. Make sure you are comfortable with the relationship. Check with the International Business Brokers Association and see if your broker is a member in good standing. Follow up on the references provided and determine just how satisfied past clients are. Check with your local better business bureau and see if there are any unresolved complaints.

3. Use a specialist

Real estate agents and other professionals sometimes hold themselves out as business brokers on a part time basis. You want someone who makes their entire living selling businesses full time. Preferably somebody who has experience in your particular industry and someone who can point to successful sales they have made for your competitors.

4. Avoid heavy up front fee structures

Typically a business broker will charge between 10% and 15% of the sale price as a fee. While it is customary for them to ask for some up front fees to initiate the process, avoid those brokers who are looking for greater than a third. Also make sure that the up front fee is deductible from the sales fee when the business sells. Following this advice will save you from having to invest a ton of cash before you actually sell the business.

5. Only contract for the business selling services

Smaller business brokers will offer accounting and legal services that you will need during closing for an additional fee and these services are typically outsourced by the broker. It may be to your advantage to contract for those services directly leaving the broker with only the requirement to focus on the selling process and not generating add on fees.

6. Share your expectations

Before you select a broker you should have at least a general idea of what you want to accomplish by selling your business. You should have a rough valuation number and you should know if you want a cash sale or stock. Share this with the broker and see if he agrees with your plan. While there probably will be differences in valuation, your broker should be in tune with the rest of your objectives. If he’s reluctant or believes that it will be difficult to achieve your goals, find another broker.

7. Keep the whole process confidential

The last thing you want to do is let the word that you are seeking a business broker or that you are in negotiations with a buyer leak out. Once it becomes common knowledge that you are selling, your relationships with your employees, customers, vendors and bankers could be adversely affected. Have an exit plan for after the sale that includes sharing the news with all those listed above.

Using business brokers to help sell a business is usually the smart route to take for any business of substance. You want your organization to have as much “curb appeal” as possible during the process and that means you should be focusing your time on optimizing the business not chasing down buyers.

Small Business Brokers

Posted on November 28, 2019 in Uncategorized

Buying or selling a business can be a very laborious undertaking, regardless of the size and profitability of the business. Fortunately, there are business brokers and business transfer agents who can help you find either a buyer or a seller. These business brokers are also very helpful in arranging the sale of a business to ensure that everything goes as smoothly as possible.

If you are considering buying a small business, or if you have a small business and you wish to sell it, there are brokers who specialize in small businesses. For small businesses, finding the right buyer or seller can be difficult.

A small business broker helps you gain access to a bigger group of buyers and sellers and increases your chances of success. Small business brokers work just like any other broker or transfer agent. They are similar to real estate agents in that they match sellers and buyers. Moreover, a good business broker can help your business achieve its maximum value. Not all business brokers, however, are right for small businesses. Thus, the trick is to find the best broker to handle your small business.

There are some tips you can follow to help you find the right business broker. One of the best methods in finding a good broker is getting referrals. Ask around for recommendations from your contacts and acquaintances.

You can also consult the International Business Brokers? Association (IBBA). This trade association of brokers has over a thousand members and can provide you with professional certification. Once you find a broker, research his/her credentials, background and experience. You can also check the Better Business Bureau for further investigation.

Choose a broker who is knowledgeable and experienced. Whether you are selling a small business or looking for a new business opportunity to acquire, a good small business broker can streamline the process and ensure the success of the purchase.

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