Things you should know about working with business brokers
Whether you are selling or buying a business, your best option is to work with a reliable business broker. Now, you may be incredibly lucky and find the business that you want all by yourself. Or, if you are selling your business, a huge company may approach you with a terrific offer. But those situations are few and far in-between. This is why, when it comes to dealing with businesses, a business broker will be your best friend. So, lets us take a look at certain things you should know about working with business brokers in order for you to have a successful experience.
Before you start buying or selling
When it comes to looking for a business to buy or trying to sell yours, one of the worst things you can do is to simply call your nearest broker. Remember, this is not something you want to do with half a mind. This business maneuver you are making needs to be strategic, well-informed and properly executed. This is why, before you start working with business brokers, there are a couple of things you absolutely need to look into.
Research, research, research
So, yeah. Research. In order to make any smart decision, be it about selling or buying a business, you need to do research. If you are selling your business, you need to study the current market trends. The timing of your sale can be just as important as your current market value. So, try to study up as much as you can to find the right time to sell your business.
In order to buy, sell or run a business you need to do ample research.
Alt: Four different people doing business research before working with business brokers.
If, on the other hand, you are looking to buy a business, there is a plethora of different tips and secrets you need to research. First, you need to figure out which kind of business you would like to run. Then you need to study which businesses are for sale and how much revenue you can yield from them. Remember to constantly compare your business with your future competition, as they will be your best reference point. All in all, there is a lot to look into and a lot to figure out. So, the sooner you start researching your deals, the better.
Working with business brokers
The most important thing to remember when working with business brokers is that there are good ones and there are bad ones. If you simply look for a broker by calling the first one that you stumble upon, there is a good chance that you will just waste your time and money. Finding a good broker is tremendously important.
The best place to start looking for your future business broker is online. Start by selecting an area where your business is (if you want to sell it) or where you would like to buy a business in and look for brokers that are situated in that area. Just as you can relocate anywhere on the Miami territory with reliable Miami movers, you can also deal with any business situation with a reliable local broker.
A good local business broker will be your best friend when it comes to both selling a buying a business.
Alt: A business broker walking on a street.
In order to have the necessary info and connections to do their job, a business broker needs to focus on an area. If they spread themselves too thin, they cannot properly keep track of all the changes in business trends and company values. Furthermore, a successful business broker keeps track of his clients. This allows them to have the necessary communication with the business community and maintain a good reputation.
Legitimacy comes first
Once you find brokers in your area, you need to sort through them. Start by checking their legitimacy. First, ask whether they are a member of IBBA (International Business Broker Association). Not every broker needs to be a part of this association in order to be reliable, but it is a good sign. Ideally, they should be a member of CBI (Certified Business Intermediary), but this is just icing on the cake. What is more important is to find out if the broker has been sued and if they carry professional liability insurance. If the answer to the first question is "No." and the second question is "Yes." you can afford to work with this broker.
Interview with the broker
Once you've made a list of reliable business brokers in your area, you need to find the one that suits you. Remember, the broker you hire will either end up finding you a decent proposal, or they will waste your time and money. Therefore, it is up to you to ensure that you find the one that will do the former. How can you do this? It’s simple. Contact each of them and see how well they suit you. Among the questions you can and should ask are:
- How long they've worked as a broker?
- What is their track record?
- How do they deal with market listings?
- Do they have any former clients you can talk to?
- How do they evaluate a business?
- How much do they charge?
- Do they have websites they use for listings?
- Will they agree to Carve-Outs?
- Are they willing to assist you without listings?
Questions such as these serve to help you better understand your business broker. And only by asking them can you make sure they are up for the task.
Knowing how to conduct an interview is essential for working with business brokers.
Alt: A woman talking with a business broker.
Working with a broker
In order for your partnership to work, you and your broker need to be on the same page. This means that you need to be honest, forthcoming and determined in your requests and expectations. Talk with your broker until you are sure that they understand your situation. The better you can communicate with your broker, the easier it will be for them to help you out.