What Is a Business Broker? How to Hire the Right One

Hire a Business Broker

Here are 7 tips to best choose and hire the right business broker.

7 Tips for hiring a qualified business broker:

1. Rely on referrals and ads

2. Dedicated practitioner

3. Experience

4. Industry knowledge

5. Public reputation

6. Professional connections

7. Likable

The selling and buying of businesses in the United States are more common than you may have thought, with 10,312 businesses changing hands in 2018 alone. 

The reasons people decide to buy or sell businesses are varied. It could be that changes occurred in your life in the last year or that you simply want to take a new direction this year. Whichever the reason, selling or purchasing a decision is among the biggest decisions you’ll ever make.

Whether the outcome of the transaction is a successful one depends on your business broker. But what is a business broker? More importantly, how can you hire the ideal business broker for you?

If you’re asking yourself these questions, you’ve come to the right place. In this article, we tell you all you need to know on how to hire a business broker.

Read on to learn more.

What Is a Business Broker?

A business broker refers to a trained individual or a professional agency whose role is to aid the sale or purchase of a business. Primarily, business brokers help their clients secure the best price for the business. They’re also responsible for submitting the appropriate paperwork and completing the needed permits or licensing.

As you’re going to find out, the whole process of transferring the ownership of a business can be lengthy and complicated. That’s why it helps to use a business broker, especially if you’re the seller.

A business broker can suggest a realistic price value for your business and properly advertise it for sale. They can also screen and interview potential buyers. A seasoned business broker will also help you in properly preparing your business for sale.

If you’re the one considering buying a business, a business broker can help evaluate the businesses you’re considering. They will also get the cash flow statements and financial statements of those businesses so you can make an informed decision. 

A good business broker will also help you secure financing, besides holding negotiations with the seller on your behalf.

Tips for Hiring the Best Business Broker for You

Now that you know when to get a business broker and have seen what such a professional can do for you, it’s time to look at how you can get the best one for you. Read on for practical tips on finding a great business broker. 

Rely on Referrals and Ads 

One of the best ways to find a business broker is through referrals from trusted contacts. Your friends, relatives, or colleagues may be able to recommend a business broker they’ve worked within the past.

You can seek out brokers in the business sections of major newspapers. Narrow down on two or three suitable candidates and interview them.

Choose for a Dedicated Practitioner 

During your interview, find out whether the business broker practices full-time or part-time. A dedicated practitioner can add a lot more value to the sales transaction as they’re likely to have a larger network of contacts. 

Where you’re selling a company worth millions of dollars, it’s best to work with an acquisition or merger intermediaries. 

Ask About Experience  

Industry experience is a great asset in any profession. Inquire how many years your prospective business broker has been in the industry. Sure, everyone starts somewhere, but when you’re engaged in a transaction as sensitive as the sale or purchase of a business, you don’t want to work with a newbie.

But it’s not enough that the broker has been in the industry for years if they’ve only executed a handful of deals. Work with someone who has successfully helped a considerable number of business buyers and sellers seal deals.

Consider Industry Knowledge  

Top business brokers will usually have worked with a variety of businesses. However, most successful brokers develop a liking for particular types of businesses or industries over time. 

Don’t hesitate to ask what particular types of businesses your prospective business broker handles regularly. If you’re looking to buy a SaaS company, working with a broker with industry knowledge on such businesses can lead to a better outcome for you.

Assess Their Public Reputation

If someone recommended the broker to you, it’s a good indicator that you’re going to have a great experience working with the broker. But if you found the broker through an online search or newspaper search, it’s a smart move to learn more about their reputation. 

So, how do you evaluate a broker’s reputation? The first place to start is online. Read online reviews to find out what people say about the broker.

You could also ask for a list of previous clients from the broker during your interview. Follow up with two or three of those clients to what they say about the broker. If past clients generally seem happy with a business broker’s services, it’s a good sign that you, too, will love working with them. 

Inquire Whether They Have Connections  

Besides the business broker, you’ll need other professionals to help you along this journey. These include accountants, attorneys, bankers, and others. Finding a business broker who has connections with such professionals means that you won’t have to spend time and resources finding them on your own.

Of course, not all great brokers network the same way. However, a broker without a professional network tells you a lot about how they do business.

Consider Likeability

You’re not looking for a spouse in your broker, but you’ll be working together for months. The transaction you’re undertaking together is an intense one and involves highly personal matters. That’s why you want to gauge from your initial meeting whether things are going well between the two of you.

If you and your broker do not seem to be getting along well during your interview, it could signal challenges on the road ahead. It’s best to move on to the next potential broker.

Find the Right Business Broker for You

Hopefully, we’ve aptly answered your question, “What is a business broker?” Given how significant this professional will be when you’re buying or selling a business, it’s critical that you hire the right one for you.

Are you interested in the services of a reliable business broker in your area? Get started today.

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Preparing Your Business for Sale: 6 Tips to Attract the Best Buyers and Make a Great First Impression

Attract The Best Business Buyer

Here are 6 tips to prepare your business for sale

While there are entrepreneurs that stick to a particular business till retirement, there are several others that sell their businesses at one point and go after other ventures. Whatever your reason for deciding to sell a business, it is important that you attract the best buyers and make a great first impression. Wondering how to make that happen? We will discuss six tips that can help you make the best out of your exit from your business:

 Prepare Your Key Employees for the Move

One of the first things to do to ensure that you sell your business smoothly is to give incentives to your key employees and prepare them for the imminent change. They can create a serious conflict of interest when you go about trying to sell the business behind their backs. Consult with them early and make sure they are part of the process.

 Put yourself in the Potential Buyer’s Shoes

One of the ways to attract the right buyers for your business is to put yourself in their position. Doing this will help you to make some changes that help you and the potential buyer. Furthermore, you can identify areas to improve on and make a great first impression.

 Get Help in Areas You Need It

It is unlikely that you currently understand everything about selling a business. Even if you have completed similar deals in the past, it can always be helpful to get external help. Some business brokers in your area who understand your industry can provide insights and help you reach out to genuine potential buyers.

 Interested to sell a business

Get Your Numbers into Shape

One aspect of your business that needs to be super perfect before you make contact with any potential buyers is your financials. Your financial statements will generally determine the value of your company. The way they are prepared and presented will give your potential buyers an idea about how your business is running. When they are less credible, Potential buyers will be discouraged. It may be necessary to have your financial statements audited or, at least, have them reviewed by a reputable accounting firm.

 Create a Growth Plan for the Business

Though you are ready to exit the business, there is nothing wrong with having a growth plan for it. In fact, it can help you attract the right buyers and make a great first impression. Make a viable plan that shows that the business you are trying to sell has opportunities ahead of it. If you can credibly show three years of meaningful growth, most buyers will be impressed.

 Plan Your Information and Sales Package

There is some very important information you will need to successfully convince your potential buyers to take up ownership of your business. Your marketing materials will need to be unique and it is helpful having a business broker by your side to help you through the process. Plan ahead and prepare an information and sales package that will convince the right buyer.

 Selling a business is an act you should never take for granted. You need to approach it the right way in order to get the business well prepared and attractive. The six tips discussed above will also help you make a great impression when the right potential buyers come knocking.

 Are you preparing your business for sale? Log in today at BizNexus. Our trusted experts are always available to guide you through the entire process and ensure that you get the best buyer for your business. An amazing experience awaits you.

BizNexus -Learn More From Our YouTube Playlist:

PREPARING TO EXIT YOUR COMPANY

Have you checked out our podcast?

THE BIZNEXUS ROUNDUP

Quick & dirty interviews, war stories & tips from the trenches of business acquisition, growth & sale. We aim for value, efficiency & fun, so you'll walk away with something useful to take with you along the journey of buying, growing & selling a business.