Sometimes business brokers get a bad rap and in most cases it isn’t deserved. What is most important for the success of your business sale is enlisting the right professional to help you. The handful of bad business brokers out there have made business owners apprehensive about getting the help that they desperately need during a business sale. What you need to do before you list your business with just anyone or with the first name you found online is ask questions. Save yourself the bad experience and get a good broker right off the bat.
How do you find a good broker? Again, ASK QUESTIONS. What follows are a series of articles about the questions you need to be asking a potential broker and why:
What kinds of questions should you ask a broker before you let them list your business? Part 2:
When you call up a business broker for the first time, the stat they will usually throw at you first is how many listings they have. This number may seem impressive in some cases, but the much more important question is:
“How many business transactions have you closed in the last year?”
A broker who will let buyers list businesses for whatever they want or brokers who will take any listing, no matter what it is, just to boost their numbers – these are not the people you want working for you. You want a broker who is selective in their choices of listings, and most importantly you want someone who is actually good at their job.
The easiest way to determine if a broker is good at their job is to ask them what their results have been- recently. Fifty closed deals is impressive until you find out that’s the total since they became a broker and they’ve been in business for 30 years. You should also ask if the number of closed transactions they are giving you are theirs or if they include the whole region or company (if they are part of a larger brokerage firm instead of a one-man shop). Many brokers in these larger companies will give company stats as their own.
An individual broker who has at least a few closings in the past year would probably be a better bet than a broker with 50 listings and only one annual closing. You want someone who can close deals because the point of putting your business up for sale is to sell it. It may also be helpful to point out hat the bigger the deal, the more time a broker must devote to it, so a few very large deals may mean more than just a few small ones, although it depends entirely on the brokers involved and the deals themselves.
The key here is to ask “How many business transactions have you closed in the last year?” because it will give you a good idea of the work ethic, results and knowledge/experience you will see in your own transaction.
Would you like to hear about the number of transactions we have closed in the last year? Do you have questions about what we could do to help you get your business sold? Please leave a comment or question here, and we will be happy to help you with any questions you may have.