Obviously, at our office we may be a little bias on who you should go with as a broker. So, below we stick to the facts on overall qualities and characteristics shared by great brokers, also known as business intermediaries. This way you have the information to make your own decision on the right broker for you.
- Credentials. Certified Business Intermediary (CBI) and the Merger & Acquisition Master Intermediary (M&AMI) certification are important credentials for business brokers, awarded by the International Business Brokers Association (IBBA) and the M&A Source. The designation means the intermediary has met certain requirements in education, experience, knowledge and ethics.
- Transaction and Other Fees Assessed. Most brokers don’t charge upfront transaction fees, if they do it is likely you should steer clear. Rather, most brokers are paid a commission upon the sale of your business. There may be other fees, such as those associated with determining business value. It is important to understand these fees, and watch out if you find “hidden” fees. A good broker is upfront about the costs associated with their services and what is included in the scope of work.
- Business Valuation. The broker you choose should have an in-depth understanding of different valuation approaches and will be able to explain them to you. A good mergers and acquisitions firm will have at least some internal resources for determining business valuation as well as contacts with third party valuation firms that can complete high-level valuations. Any in-depth valuation is likely something additional you’ll have to pay for, but it is imperative to get the price right.
- Process for Marketing Your Listing. In order to “sell, sell, sell” you must “promote, promote, promote”. Marketing is a key element in selling for the best price, ideally attracting multiple interested buyers who drive up the price. Confidentiality is also important as you don’t want listing your business for sale to affect your business sales, employees, and so on. The superstar broker will have a defined process in place to confidentially market your business across multiple channels.
- Buyer Vetting Process. The broker should have a process in place regarding how they will asses whether a buyer is a good fit for your company, only bringing relevant, good opportunities your way. Using a business broker should save you time, a precious commodity that shouldn’t be wasted on mismatched buyers or having every lead brought to your attention without any due diligence.
- Testimonials. Recent past customers of the business are a great source of information. A superstar broker is able to easily provide multiple references.
- Track Record. There is only one way to truly become a superstar broker – closing sales. All the other characteristics are important but in order to be a superstar, a broker has to close good deals consistently. Ask any potential broker about how many current listings they represent and the number of businesses sold in the past year. In an Inc. Magazine article they benchmark good brokerage sales at 10 sales a year, commonly listing 15-20 businesses at any given time.
- Personality and Trust. The old adage, “People do business with people they like” still holds true today. You need to be comfortable with who you choose, have positive feelings and ultimately trust who you are working with. There are a fair number of brokers out there, so chances are you will find one that is the right fit for you and your business. There are also some really lousy brokers out there, so make sure you get to know who you will be working with.
If you’d like to know more about us and how we measure up, you can read more about us here, check out our 9 Step Sales Process here, or contact us today via phone at (203) 772-3773 or by submitting our contact form. Go ahead, contact a few brokers, we know our superstar team will stand up to the challenge and we can’t wait to work with you.
In case you think we are simply too bias, here are some other resources on choosing a business broker from independent sources:
- 5 Questions to Ask When Choosing a Business Broker, Inc. Magazine
- Why You Should Use CBI to Sell Your Business, International Business Brokers Association (IBBA)
- How to Find a Business Broker, Entrepreneur.com
- Selecting a Business Broker to Sell Your Business – 12 Quick Tips, National Federation of Independent Business (NFIB)