How to choose the right business broker to help you buy a new business in 2019

Top Guide On How To Find a Great Business Broker in 2019

Find Your Soulmate Business Broker

A business broker is typically working with multiple buyers and sellers of businesses at any given time, and communication can slip through the cracks if you’re not linked up with a proactive, smart and organized intermediary. Buying or selling a business can be a very long, tough process, and having the right business broker at your side to offer guidance and insight into market conditions, negotiations, and buyer and seller options can be a game-changing solution if you can find the right fit.

Find a business broker to help buy a business

An often overlooked option to help begin the journey towards buying your own business is to simply reach out to a business broker for guidance before you begin your search. If you can identify a quality business broker this can be a way to help jump-start your search and increase the chances of finding a successful acquisition. Brokers typically represent multiple deals within their category of expertise simultaneously, and if you’re able to establish a relationship with a productive broker you gain access to a continuous stream of deal-flow. The trick is to identify that standout broker.. The one who’s knowledgeable, productive, and won’t waste your time pitching you sub-par, low probability deals for sale.

Speak directly with recent references.

Don’t even bother with a business broker if you can’t verify if they’ve historically done well by their clients on both the “buy” and “sell” sides of the transaction. Ask to speak with owners of businesses the professional recently helped buy or sell, and check for relevant reviews online. If you’re researching the professional’s profile online on his or her company site, LinkedIn, or Biznexus definitely prioritize DEAL experience over education, listed skills, or any other potentially biased information manufactured by the professional him or herself.

Make sure the professional keeps working for you

Set communication expectations from the outset. A business broker is typically working with multiple buyers and sellers of businesses at one time, and communication can slip through the cracks. Set up a recurring weekly, or monthly meeting with the broker to review his or her listed deals. Even better, as you develop your relationship with the broker over the course of regular calls you position yourself in the front of the line to hear about the deals the broker may be working on, but hasn’t officially listed… Getting first crack at an unlisted deal is a great way to get a head-start on developing a relationship with the seller, and to potentially avoid a bidding war with competing buyers if you can negotiate terms before the competition gets wind.

Buying a business can be a very long, tough process, and having the right business broker there to help feed you potential deals, offer guidance and insight into market conditions can be a great help. Do your homework before you choose any professional to help you with the process, and make sure you’re clear on expectations and compensation from the outset. Standard shameless plug: We recommend you check the BizNexus directory before making contact with a potential business broker for any helpful reviews, ratings or content that could provide guidance.

A few useful links if you’d like to dig deeper on the topic:

1. What you Should Know About Working with a Business Broker. -Inc.

2. How to Find a Business Broker. -Entrepreneur

Why you need seller financing to buy your next business

If your broker is telling you that seller financing isn’t an option to buy an existing business that you like, I recommend you test that with the seller of the business personally.

What is seller financing?

It’s when the seller of a business acts as your bank. More often than not, when somebody is selling their business, they expect to lend you up to 50% of the business value in the form of a note, carrying interest and being paid off through the cash-flows of the business over a period of five to seven years after the purchase of the business.

In his blog, business broker guru Richard Parker explains:

While the terms can vary including interest rates, length and percentage of the total deal being financed, a general rule is for the seller to carry thirty to fifty percent at current interest rates plus a few percentage points over three to seven years.

The dilemma for many buyers however is never getting to the point of presenting sellers with an offer because they are often stonewalled by brokers or the seller’s legal/financial representative, or family members trying to dissuade them from carrying a note.

I can certainly understand a seller’s trepidation, but the reality is that if they truly want to sell their business, they have to participate in the financing. End of story. Otherwise, their business will be another one that remains on the market forever.

–Richard Parker, author of How to Buy a Good Business at a Great Price 

How common is seller financing?

Most sellers start out cold on the idea of seller financing because of the risk involved for them when it comes to the buyer actually paying them back for the loan, but it’s a great move for everybody involved when you consider the fact that this tool helps the seller attract potential buyers, and may even help the seller achieve a higher final price for his or her business. Seller financing can also help lead to a faster closing, which increases the probability of a transaction successfully closing.

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