Biggest Considerations in Choosing the Right Broker to Sell Your Business
As a business owner, you’re going to come to a point where the thought of selling your business is going to come across your mind. You may not be ready to sell your business right then or even in the near future, but when the thought came across your mind, were you prepared in your thought? Did you know what the selling process entailed?
If you’re like most business owners who had that thought, you probably had no idea what the entire selling process entailed, simply because when you started your business, you never envisioned yourself selling it. In your mind, you envisioned success for the long-game…
Once you made the decision to start your business, the only thoughts going on in your mind were how to effectively manage your time, where to find a good office space, hiring great team members, and any other thoughts that contributed to the success of your business…
Selling wasn’t even an afterthought, despite the Small Business Administration stating that roughly 80% of small businesses survive their first year.
But the reality of entrepreneurship is that planning how you want your business to end is just as important as how you plan to start your business. Now, having an idea of how your business “ends” isn’t saying you’re starting a business just to watch it fail… It’s being proactive about your business’s future.
Some people’s businesses “end” because they passed it on to their children, because they fell ill, their business was declining, or they found another opportunity to capitalize on, leaving them to sell their business. But regardless of why a business owner decides to end their entrepreneurial career in one area, they’re still going to need to find a business broker to help them through the process.
Now, the key to finding a broker to help you sell your business is to find the RIGHT broker… There are lots of business brokers out there that are very good at what they do but that doesn’t mean that they’re a good fit to sell your business.
In choosing the right business broker to help you sell your business, there are a few things to you need to consider.
Biggest Considerations in Choosing the Right Broker For Your Business
Knowing Where to Look For Brokers
So, before you can pick out a business broker, you need to have a good selection of reputable brokers to choose from. You, of course, can do a basic Google search for business brokers, but the only problem with that is you’re going to get a number of business brokers from everywhere and in a multitude of different niches.
When conducting a Google search, you’ll want to incorporate different keywords in conjunction with “business broker.” For example, if you live in Kansas City, you’ll want to look up Kansas City business brokers to see brokers in your local area. From that list, you can then search by your industry niche. But you have to start somewhere, and getting a list of reputable brokers is where to start.
You can also check out your local Chamber of Commerce and the International Business Brokers Association (IBBA) to see if your broker or firm of interest is a member.
How Long the Broker or Firm Has Been in Business
Ideally, you want a broker with some years of experience under their belt. That’s not saying that a new to the industry broker won’t serve your business well, but that will be up to you on how knowledgeable and capable you feel the broker is to handle your business needs. It’s recommended that a broker have at least 10 years of experience.
Years of experience is highly recommended simply because brokers and firms have been known to come and go. The last thing you want is to do business with a broker that potentially needs to sell their business more than you!
How Strong Their Database of Buyers Are
When you’re working with a broker that has 10 years or more in the industry, it’s pretty safe to say that they probably have great working relationships with potential buyers as well as contacts in your industry. Ideally, you want to look at brokers who have contacts with 25,000 different potential buyers or more. This won’t be uncommon for a broker with years of experience under their belt.
Them having a substantial database of buyers is important because selling your business isn’t only a major business move for you but it’s going to be a major business investment for the potential buyer as well. So, having the flexibility to weed out the serious and qualified buyers from those who aren’t, is going to put you and your broker in a better position for negotiations.
