Finding the
Right Broker
Experience Matters
According to the New York Times, 80% to 90% of businesses listed for sale with a business broker never sell. No doubt there are many factors that contribute to this that are outside of your control – the economy, the market, and the industry to name a few. The one thing that you can control – hiring the right advisor that will act in YOUR best interest.
Selling your business is a significant milestone that can profoundly impact your life.
To ensure that you navigate this process effectively, consider enlisting the help of an experienced business broker.
Caution Signs to Watch For:
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Unrealistic Pricing Promises: If a broker claims they can secure a significantly higher price for your business than you anticipated—especially during the initial meeting—exercise caution.
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Upfront Fees: Be wary if the intermediary requests a substantial fee upfront or a monthly payment before any work begins or before your business is sold.
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Guaranteed Buyers: If the broker or their team insists they already have multiple buyers lined up for your business, be skeptical.
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Lack of Valuation Knowledge: If the broker appears unfamiliar with business valuation concepts or cannot clearly explain them, this is a red flag. A competent broker should be able to discuss valuation principles and how they apply to your situation.
Although there's no surefire way to identify a reliable intermediary, here are some important questions to consider."
What is the broker’s level of experience?
Successfully selling a business requires a wealth of expertise. The typical age of a broker is 55 for a reason; they need a solid background in accounting, business valuation, legal matters, and, most importantly, sales."
Is the broker accredited and licensed?
Look for credentials from reputable organizations such as the International Business Brokers Association (IBBA), which awards the Certified Business Intermediary (CBI) designation. This designation indicates that the broker has successfully completed specific courses and passed an examination. There are also other valuable certifications to consider.
How will they promote your business?
The broker should clearly outline their marketing strategy for your business. What methods do they employ to identify potential buyers? This process should be comprehensive, as each business is unique and may require various approaches and strategies.
What services does the broker offer?
The broker should guide you through the entire sales process and be prepared to offer supportive services that complement your advisory team.
Is the broker open to collaborating with your advisory team?
Are your advisors familiar with this intermediary? This relationship is crucial, as your advisors have a deeper understanding of the business and can help facilitate a successful transaction. Ideally, you should establish strong connections with essential advisors, including accounting, legal, tax, and valuation experts, well in advance of your planned sale.
Choosing the Right Partner
Selecting the right individual to lead your Exit Plan and business sale is essential. A trustworthy professional will bring valuable experience, actively listen to your needs, and serve as a liaison between their team and yours. Reach out to us to discuss whether you and your business would be a good match for our team.