The first thing you need to know about selling your business is that you can’t do it alone. As much as you might not want to admit it, the help of highly experienced business brokers with a track record of success, is your key to closing a great deal. Here are the important factors you ought to consider when searching for the best business broker for you:
1. Consider the size of your business and the financial transactions that will be made
While investment bankers usually deal with very large businesses (100 million + in annual revenue) business brokers tend to handle businesses that make under 10 million. When searching for your local business broker, ask them whether or not they have experience working with businesses with a similar revenue range as your own.
2. Gauge the reputability of the business brokerage firm
The easiest way to do this is by finding out how many successful business transactions they’ve dealt with. If the type of business you’re selling is relatively common, it might be appropriate to see how much experience the brokerage firm has in selling businesses similar to your own. However, if you are in a very specific niche industry, you’re not likely to find too many business brokers that have handled these types of business. Also, it doesn’t hurt to ask friends about their business brokers, even if they’re in an entirely different industry. You never know what could result from a good referral.
3. Look for a brokerage firm staff with credentials
When selling a business, you want to make sure the business brokerage firm has several highly credentialed members on staff. Looking at the education and previous experience of each individual staff member is key. Depending on your business, sometimes several brokers at a single firm will pool their diverse knowledge and experience together, in order give you the greatest possibility of getting the best deal. While one staff member might be good at pricing, another might be an expert at closing – all vital elements in selling your business.
4. Find out what type of contacts the business brokers have
A business brokerage firm is likely to keep a large database of potential buyer prospects. This is often developed from buyers that inquired on past opportunities. A large brokerage firm likely handles a greater transaction volume, and has more potential buyers from which to draw upon.
5. Do a face-to-face interview with the business brokerage firm
Although you may have learned about many of the above issues, either on the phone or via their website, it’s vital that you meet with your prospective business brokers in person. Selling a business can take many months, and sometimes even years. So, you want to make sure you’re comfortable with who’s handling your business. And, since business brokers often get paid on their success as opposed to an hourly rate, it’s important that they meet with you to discuss your business thoroughly, so they can decide whether or not they’re investing their time wisely.
All in all, the selling of a business is carried out best when you have the experience of friendly and experienced business brokers to help you. They’ll prepare the marketing package, deal structuring, negotiations, etc – things you’d probably have difficulty handling on your own. Simply follow the steps above, and you’ll be sure to have a high return on your investment, upon selling your business.