SIX QUESTION BEFORE HIRING A BUSINESS BROKER

When you have decided to sell your business in the market, you have two main options available either you can try to sell your business on your own, or you can hire a business broker to handle the details of the transaction. Most business owners don’t have the time and skills to negotiate a safe and fair deal. Using a professional business broker is often the best option for them. Many business brokers will be qualified to help sell your business. But which one is right for your business? It is very much important to understand how to evaluate a brokerage firm.

Here are six questions you need to ask before hiring a business broker:

1. How many years have you been selling businesses?

It is crucial to hire a business broker that has years of experience in selling businesses like yours. Selling a website is much different from selling a restaurant. You can determine their experience level by looking at the buyers associated with them and by listening to how they use the terminology associated with you business industry. An inexperienced broker can not only waste your time but will also cost you money.

2. Do you work from home or an office?

When it comes to business brokers industry, working from home will sometimes identify that this is not the individual’s full-time occupation. A business brokerage with an office means that they have a team of qualified and professional brokers that will help to reach your goals in selling your business fast and for best value.

3. How many qualified buyers do you have?

A broker who has a large number of qualified buyers is always the best one. Many brokers’ claims to have a large number of buyers but most of them has a generic email list and they actually don’t know the buyers personally. The more the number of qualified buyers, the more is your chance to excel in the market.

4. How many businesses have you sold?

Hiring business brokers who has not sold many businesses is not a good idea. An average business broker will sell eight to ten businesses per year. Ask them questions like how many businesses like mine have you sold in last 5 years.

5. What is your success ratio?

If a broker tells you that they have sold 10 businesses like yours in last two years, you should ask them a question that out of these how many have been successful. This will give you a clear indication of the experience level of a broker and their success ratio.

6. How do you value a business?

Asking business brokers how he will value your business, this will give you a good idea of how experienced they are. Business valuation is a complex topic, so steer clear of any brokers that mention a generic valuation formula, as every business is different.