Like any industry, there are great business brokers and there are those who shouldn’t even call themselves business brokers.
How do you ensure that the broker you choose to list or buy with is one of the great ones?
What kinds of partnerships do they have with other brokers and with broker’s associations?
If a broker is a lone-wolf of sorts with no industry connections, they might have a tough time properly marketing your business or getting access to the listings you are interested in.
How many transactions have they closed in the last year?
If a broker has only closed one business transaction in the last year (or none at all), they are likely not the broker for you. Results will speak volumes about work ethic and knowledge of the industry.
Do they work in a very large office with many brokers, or do they work in a much smaller brokerage?
The benefits of choosing a broker that is part of a much larger firm may be the associations with other brokers that they have in-house. This might give you access to more listings and more potential buyers. Just remember to ask about a broker’s individual results. The firm they work for may have sold 50 businesses last year, but they may have only been responsible for one. On the other hand, there are some in the industry (usually those who are part of a very large office) who will tell you that using a one man shop or a small brokerage is a mistake. This is not necessarily the case. Look at results and inquire about the industry associations they have. A one man shop or a small brokerage might be your best bet because they are able to achieve success without the backing of a larger firm – a surefire testimony to how they work.
Are they really a business broker?
This might sound like a ridiculous question to ask, but it is an important one. Some involved in the real estate industry will try to help clients with buying and selling businesses while they are working on home and property listings. Selling a house and selling a business are two completely different animals. You might have a great realtor, but that doesn’t mean that they will know the first thing about a business transaction. Other types of professionals may try to broker business transactions as a side business. Business brokers are specialists and their field, so use an actual business broker for any business transaction if you want to ensure success.
Are past clients happy?
Look for a business broker with positive reviews and testimonials from former clients. Ask about whether they have repeat clients, and if they have any references. Also inquire about how they get the majority of their new business. If it comes from referrals, then you know they are good at what they do.
As with any major business decision, do your homework. The right choice of business broker can make your buying or selling experience a very positive one.
Are you a buyer or seller and want to know more about how to choose a business broker? Would you like to know more about how we help our clients through a business transaction? Ask us! Leave any questions or comments and we would be happy to help.