How to Choose the Right Business Broker - Part 1

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So, you have decided that you want to sell your business or you are moving in the other direction and you want to buy a business.    In many cases, hiring a professional business broker is a smart thing to do.   Business brokers can help you navigate the often complex process of buying and selling a business.    So, how do you go about choosing a business broker to help you?   Here are a few general tips to consider:

1.  Think Local.   In most cases, you will want to hire a business broker who is familiar with your local market.   Knowing the local market can be a great asset when it comes to establishing or negotiating the price of the business.

2.  Talk to References.     Just as you might do before hiring a contractor or making someone a job offer, it is always prudent to ask for at least 3 professional references.   For business brokers, you will want to talk with folks they've helped buy or sell a business.    If they are new to the business brokerage business or have taken a hiatus and can't supply buyers or sellers as references, in the very least talk to some professionals that can attest to their work ethic, honesty, diligence, and intelligence.

3.  Google Them.   That's right, Google their name -- "Fred Flinstone, Business Broker, Red Rock Arizona"  -- see what you discover.    Hopefully you will find them on sites like BusinessBroker.net and other reputable Business for Sale websites.   Check out their broker profiles, how many listings do they have, what type of listings do they have, what are their credentials?     You should also find their website or the brokerage's website in which they are affiliated.   If you do a Google search, and find limited information about a particular broker, then you may want to consider another broker.  In the very least, ask them why they are not visible in the search engines.   Ask them - "how will  people find my business for sale if I list with you?".

4.  A Particular Niche.   Some brokers specialize in a particular industry or a particular type of business -- for example, some brokers may just list restaurants for sale, others may just do convenience stores.     If you have a "niche" type of business to sell or want to purchase a "niche" business, then working with a broker who specializes in that area may be a smart thing to do.      In summary, it is just important that you find a business broker who has experience buying and selling businesses that you also own or want to purchase.

5.   Starbucks Test.   Once you've narrowed your pool of possible brokers down to 2 or 3 that you think may be good candidates to work with, then invite each of them to grab a cup of coffee and chat.     It is really important that you have a good first impression and feel comfortable with the person.   Ask yourself questions like -- would this person represent my business well, do they dress professionally, were they on time, did they seem knowledgeable, did they seem to have an even temperment?     After you've sipped down your latte and gotten back in your car, stop and think for a minute -- how are you feeling right now -- go with your gut -- go with the person that left the best impression - you should feel good after meeting with them.

 

Hopefully these tips have given you some good "food for thought".   This is not an exhaustive list by any stretch, but hopefully will get you moving on the right track!    Check out our Business Broker Directory.   We wish you all the best, and as always, feel free to CONTACT US BY E-MAIL or by phone 1-877-342-9786 should you have questions, suggestions, or comments.

Thank-you,

Matt Maxwell, GM
  • Author: Matt Maxwell
  • Date: October 19, 2012
  • Category: Business Brokers
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