Working With Business Brokers: What You Should Know

 

Like real estate brokers, business brokers are compensated by sellers, which is something you should be aware of if you're a buyer. Simultaneously, an expert broker can assist you in narrowing your search to firms that fit your requirements. As a seller, a broker can help you with pricing to promote your company to potential purchasers.

Sellers Beware When Working With Brokers:

Consider the following questions before choosing a broker if you've reached the stage where you'd like to sell your company. 

What are the qualifications of business brokers?

When interviewing brokers, ask the following crucial questions to learn more about their qualifications:

Are you licensed? Check to see if the broker is a Certified Business Intermediary (CBI), which is the industry's gold standard.

Is the International Brokers Association a member of your organization? You may check your broker's membership status by going to the IBBA business broker search site and typing in the broker's name.

What is your experience as a business broker? You should ideally engage with a broker that has a track record of at least a few years.

Do you work as a business broker full-time or part-time? This question is crucial because you want to know whether the broker is likely to be on the job when an issue or requirement arises.

Is the broker well on internet?

Examine the business broker's website to see how quickly it loads, how simple it is to navigate, and what kind of businesses it has for sale. If you like what you see, you may find out more about how the site is utilized by asking the following questions:

• What is the amount of traffic that your brokerage site receives? 
• How many people frequent the site on a monthly basis?
• What percentage of your network's offices utilize this site?
• How many brokers do you have in your firm?
• What is the current number of businesses listed on your website?
• How many eligible buyers do you already have on your books?

What Have Recent Clients to Say About the Broker's Work?

Client testimonials from clients listed with the broker may appear on the broker's website or marketing materials. Additionally, request the names of owners who have sold in the last six months and whom you may call for recommendations from the broker.

How Much Does a Broker Cost?

Most brokers charge a success fee, which is compensation based on a percentage of the price paid for your business at closing. Typically, the commission is 10%. Inquire about any extra fees that could be applicable.

Carve Outs: Will the Broker Agree?

Most business brokers agreements are referred to as exclusive listing agreements because you provide the broker the exclusive right to sell your firm or its assets when you sign the deal. To put it another way, you agree not to work with many brokers at once. For the duration of the listing agreement, which is usually not less than six months, the exclusive broker has sole rights to your sale.