There comes a time when it is necessary to sell your business. It may tempt you to sell your business on your own. You should identify a reputable business broker. The challenge is in identifying the right broker from the many who exist. This guide provides you with factors you need to consider when selecting a business broker.
It is crucial to choose an experienced business broker. Consider the number of years they have been in business. Get to know the number of deals that they have closed every year. Getting this information will help you to know if they able to give you good representation.
It is an added advantage for you to look for a business broker who has specialty in your area of business. This shows that they are able to deal better with the challenges that arise and close the deal within the given time. Also, you can come across a business broker who is not so experienced but can represent you well if they have a strong company behind them.
You need a business broker with the right credentials. They need to be licensed. The broker also need to be part of associations. This will provide you with an idea of their involvement in business. They also need to be connected with other professionals such as accountants, bankers and attorneys who can play a role in selling your business.
Also, the business broker you choose needs to be open and responsive to you. They need to listen to you. They need to understand your goals. It can take some time for a business to sell. Be ready not to get good news for weeks on end. You need to decide on how often you should be communicating.
You also need to be careful about generalists. Identify a broker who is ideal for your business. Size matters too. A broker who is used to handling transactions that are worth tens of millions of dollars will not give you the attention you need if your business is just worth about a million dollars.
It is important to know in advance what the process will entail. Get to know what will be involved in valuing your business, making preparations for sale, identifying potential buyers and how to follow through. You need to know how the business broker will keep you appraised. You need to get weekly status reports, updates and calls.
Business brokers rely on commission. A broker who asks for money upfront is not genuine. Business brokers usually charge about 10 percent commission. However, you can negotiate this figure. Make comparisons of rates of various brokers for you to choose one who is affordable.You will spend a long time with the broker.If they don’t show you the potential to sell your business, choose a different broker.