If you are planning to buy an existing business or sell the own you own, an intermediary in the process is known as a business broker. Business brokers help bring potential buyers and sellers together, handling much of the behind-the-scenes requirements to smooth the way forward. Brokers will qualify a buyer, advise the owner on how best to prepare his business for sale and handle a myriad of other activities. If you’re looking for a business broker, then keep the following steps in mind.
Go to the source. Many brokers are part of a larger trade association of brokers, known as the International Business Brokers Association or IBBA. The IBBA has well over 1,000 members and is the recognized professional organization in the business broker community. Chances are that if your broker is named among them, then their reputation has been confirmed.
Ask around. Whether a broker is part of the IBBA or not, you should rely chiefly on referrals from others who have used a broker’s services. Call your local Better Business Bureau, Chamber of Commerce or business association and ask for a referral. If you know of area businesses that have recently changed hands, then call the new owner to ask for a referral.
Check around. Simply because a broker has been recommended or seems like a decent chap isn’t enough. You should ask that broker about his experience, both educationally and practically. Moreover, request a list of business deals he has transacted over the past six months. Then, call these individuals to gauge their satisfaction with the business broker and his services.
Consider category expertise. Some business brokers are generalists, serving the entire business community regardless of specific category expertise. However, you may find it beneficial to work with a professional who is a specialist in a particular area. To illustrate, if you are planning to purchase a fast-food restaurant, then a professional who deals exclusively in such transactions should be on your short list of qualified brokers. That does not mean you cannot use another broker, but it does mean that you have access to an individual who may have some insider information to a particular industry.
Require the utmost confidentiality. During World War II, seamen were told, “loose lips, sinks ships.” Everyone onboard an aircraft carrier or other vulnerable target learned to keep their mouths shut or risk the enemy overhearing the conversation and destroying the target. The same confidentiality the seamen had should be imbued by your business broker. Secrets are the name of the game and you want your every confidence shared about your business held as in a sacred trust. If the wrong information about your enterprise is put forth, it might damage your business.
Let’s make a deal. You not only want a business broker that is worth his salt, but you want a professional that really knows how to to market your business. Here, you want your broker to offer a marketing blueprint, one that describes in detail how he will sell your business. It isn’t enough to operate a splashy website — your broker must have the personal contacts to get the deal done and rely on a variety of marketing methods to spread the word. Moreover, if something isn’t working out, you will want this personal to change course, as needed.
A Better Business Broker
Clearly, having a top-notch business broker can help you buy the business you want or sell the one that you own. If you are buyer, then no fees are typically charged. If you are the seller, a commission is involved.
Even with the commission cost factored in, you should find that a capable broker will get the best price for your business, while handling matters that you may find too overwhelming or burdensome. In any case, make a point to find a business broker that has the reputation and expertise you deserve.
See Also — Richmond Business Broker: Let’s Make a Deal!