Posted 03-03-2015 12:49 pm by
Not all business brokers are created equal. When it comes to choosing a good business broker, there are 10 things you should look for...
1. Specialty. Just as there are many specialties in the field of medicine, there are brokers that specialize in selling houses, brokers that specialize in selling commercial properties, and brokers that specialize in selling businesses. Does the broker specialize in selling businesses?
2. Track record. How many businesses has the broker sold?
3. Financing contacts. Does the broker have personal relationships with key SBA lenders?
4. Choice of escrow. Which escrow company does the broker use? Does the escrow company specialize in business sale closings?
5. Marketing package. How does the business broker present your business to potential buyers? The marketing package prepared by Advantage Commercial Brokers can sometimes be several hundred pages long.
6. Confidentiality. What actions does the broker take to ensure confidentiality is maintained?
7. Minimizing liability. What actions does the broker take to minimize any potential liability?
8. Minimizing tax obligations. Does the broker understand the tax implications of purchase price allocations for both the seller and buyer? Is the broker proactive in working with your CPA to help you minimize your tax obligations?
9. Straightforward communication. You want a broker who is honest and open with you, and not afraid to tell you the truth even if it is hard to hear. There are brokers who give artificially high valuations just to get the listing, and the approach is damaging to both their clients and the business brokerage industry. Ultimately, you need to ask yourself: "Is the broker specialized, experienced, and sincere?"
10. Business ownership experience. While not entirely necessary to be a successful business broker, it lends a lot of credibility to potential buyers if the business broker has personally purchased one or more successful businesses. A business broker who has personally gone through the experience of buying and/or selling a business can relate with clients in a way that is hard for other brokers to replicate. Is your broker a mere salesperson, a salesperson with less than spectacular business ownership experience, or a successful absentee business owner of multiple profitable businesses that potential buyers admire and want to emulate?
Aaron Muller is a business broker in Washington State who has sold over 120 companies and facilitated over 40 SBA loans for his clients. In addition to brokering business sales full-time, Aaron also owns 7 companies as an absentee business owner. Contact Aaron at (425) 766-3940 to inquire about selling your business.