Whether you’re in the market to buy a business or have a business that you’re ready to sell – your best bet for success and reaching a closing table is hiring the right help. In the business transaction world that help is a business broker.
What do business brokers do? They help sellers list their business for sale. They put together marketing packages and business listings and then add those businesses on listing platforms. They keep the confidentiality of the for-sale status of a business in place by vetting buyers and having qualified buyers sign the appropriate non-disclosure agreements. They coordinate conference calls and meetings between buyers and sellers and act as an incredibly important buffer in the negotiation process. They help put together offers and help solidify purchase contracts. They give advice throughout the process, as their experience with business transactions can be invaluable for avoiding common pitfalls that can cause deals to fall apart. They help sort out commercial leases with landlords and property managers. They assist with permitting and licensing requirements. They assist with obtaining financing options. They coordinate with immigration attorneys to obtain Visas for international clients.
It’s a long list. A list you probably don’t want to tackle with someone who is terrible at their job.
How can you tell if a broker is a good broker? You can watch out for red flags.
Does this business broker have no online presence at all, or a website where the last post was 7 years ago?
The business transaction process, like most things, has gone digital in recent years – from electronic signatures to virtual walkthroughs and the like. If a broker can’t even maintain a basic digital presence, then they probably aren’t up to speed on other aspects of their job either.
Do the listings for a particular broker have a ton of spelling errors or always seem to be incomplete/incorrect?
The business transaction process requires a great deal of attention to detail. If a broker is willing to leave mistakes all over their listings, how careful are they with everything else? A listing and a marketing package are an important first impression of a business for buyers. If all you’re getting is some over-copied tax returns and 15 spelling errors, it might be time to find someone else.
When you contact a broker, does it take them an enormous amount of time to respond?
You can’t expect a broker to always pick up your call or immediately respond (they should have other clients and a life outside of work) but you should be able to get in touch with them in a reasonable amount of time. If you have to wait a week for a response, you might need to find another broker.
Does a broker claim to have proprietary formulas or methods that no one else in the business has?
Well, there’s probably a reason for that. Occasionally brokers will claim to have some magic metric (for example – for pricing businesses) that no one else in the industry uses. Every business is unique, so a big part of becoming a successful business broker is understanding that every transaction will be different and each business will require a different approach. There isn’t a better mousetrap – there’s only those who can adapt the process to get a transaction done and those who can’t.
The message here is you want qualified and experienced help – and you aren’t going to get that from someone who is careless with the most important parts of their job. Keep an eye out for red flags as you begin the business transaction process.
Another good metric? Ask any potential broker how much of their business comes from referrals. Someone who does a good job is going to get a great deal of their future clients from the referrals of past happy ones.
Are you looking for businesses to buy and want to know more about how a business broker can help you? Have you considered selling your business and want to know what our marketing packages look like in comparison to others in the industry? Ask us! Leave any questions or comments and we would be happy to help.
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242