What to Look For in a Business Broker

AUTHOR

Bruce Coudrey

There are a large number of brokerage firms and hundreds of business brokers nationwide. You need to know what to look for before engaging a business broker to represent you and deliver a win-win outcome for all.

Just as a buyer would conduct due diligence before purchasing a business, you should consider doing something similar on the business broker you intend engaging.   

So what questions should you ask?  

Here’s a list of 17 essential tips before engaging a business broker:

1. Ask if they’re licensed in your state
2. Ask to view their personal licence
3. Cross check the licence number with the Office of Fair Trading in your state
4. Check where the brokerage’s head office is
5. Establish whether the brokerage is an accredited Real Estate Agency
6. Establish how long the brokerage has been in business
7. Ask what type of licences it holds and in which states
8. Ask for the principal’s details and to speak or meet with them
9. Ask if you can come to their head office to be shown how they operate
10. Determine if the broker is a specialist and request details of their experience
11. Ask what similar businesses they have sold
12. Ask them to explain to you, or preferably your accountant, their methodology for your business’s valuation
13. Establish what level of service you can expect from the broker
14. Confirm how frequently you can expect communication
15. Ensure it will be the same broker throughout the sale process
16. Ask to have the process explained from start to finish and
17. Discuss your options to list your business with your solicitor or business advisor.

If you adopt these 17 essential tips before engaging a business broker, you can rest assured the small investment of time will give you comfort and peace of mind as you advance through the sale process.   

Ian Salter – Senior Business Broker   

Benchmark Business Sales and Valuations