The adage that it takes about 10,000 hours to master any kind of craft is true of any industry, and as a small business owner you’ve probably seen this first hand. Ten thousand hours works out to about five years of full time work, and if you’ve owned your business that long or longer we’d bet you feel you really know the business and the industry inside and out.

Now the time has come to sell your business and you are looking for some help. You find a business broker who is willing to work on the cheap – and he’s a brand-new broker so you think you’ve got someone who’s fresh in the industry, that can’t be a bad thing, right?

We have just one question to ask you – were you the master of your industry right out of the gate? Did you make mistakes back then you never would today with the knowledge and experience you now have under your belt? Hiring a rookie broker is like hiring rookie you from all those years ago when you first became a business owner.

Who would you rather have handling one of the biggest financial transactions of your professional life? Rookie you, or you today? We’re pretty sure you would choose you today, because practical experience always trumps “fresh”.

The same is true with business brokers. You want an experienced pro, not the new kid on the block. How can we say this with such confidence? We see the ramifications of hiring a rookie broker all the time.

Like any industry, there are the rookies and then the brokers who have been around long enough to make a real name for themselves in their region. A seasoned vet will have working relationships with other brokers in the area (meaning a larger pool of ready-to-buy buyers), a new broker will not. We’re not saying that it’s a great thing that many newbies have a hard time getting cooperation from other brokers, but it does happen. This industry sees many budding brokers fail and move on to other careers, so the vets will typically only cooperate if you’ve already proven your staying power.

Another major reason to stay far away from a rookie broker? They make lots of mistakes. Big ones. Mistakes like these:

Treating your business listing like a listing for a house and disclosing that your business is for sale to the whole world. You will probably lose employees, vendors and clients – let alone the headaches of constantly having tire-kicking “buyers” traipsing through your business and disrupting normal operations.

Letting you price your business however you please, without any understanding of the multiples, comparable sold businesses, the market or your numbers (which are so much more than what appears on the bottom of your tax return). The purpose of listing a business should be to sell it, and improper pricing can lead to listing purgatory.

Using a one page P&L and your last tax return as your only marketing materials distributed to buyers. Look at last year’s tax return. Does the number on the bottom line truly describe your business in its entirety? Nope, of course it doesn’t. Only an experienced broker knows what works and what doesn’t when it comes to a marketing package.

Don’t make the mistake of having a rookie broker handle your transaction. Hire an experienced, knowledgeable and qualified business broker instead.

Are you a business seller who has questions about the differences between a new broker and a seasoned vet? Ask us! Please feel free to leave us a comment or question here, and we will be happy to help you.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com