Selling businesses has become a common thing in the United States, with over 10,000 businesses being sold in 2018 alone. Now, there are several reasons why most people choose to sell their business. But, whatever the reason, selling your business might be one of the greatest life decisions that you will ever make.
What makes selling a business a big challenge is finding the right buyers, especially if you are not in a growing industry. This is one of the reasons why most people approach business brokers to help them in selling their business. The main responsibility of business brokers is to connect sellers with prospective buyers, in addition to business valuation and professional advice. Hiring the right broker can help you get the best possible deal out of your sale.
For example, if you want to buy Jacksonville businesses for sale A qualified business broker can help you get more money for your property than other sales brokers do. They have access to more information about buyers than other sales brokers do, which means they can help you get a higher price on your property by knowing what buyers are looking for in their new location.
With that said, let’s look at the top 5 rules about choosing a qualified business broker.
Table of Contents
Check the legitimacy of the broker
The business brokerage industry has thousands of professional brokers. However, just like all other industries, there are business brokers who pretend to be legitimate, yet they are not. With that said, it’s always a good thing to make sure that you validate the business broker before hiring them.
Here are a few things that you should check when hiring a business broker:
- Does the business broker have an about us page or a LinkedIn profile? Check to see the information that you can find about the business broker on these pages. Also, check to see if you can find any articles that they have published related to their business.
- Does the business broker have an address? If so, you must validate whether the address is legitimate. Also, it’s good to confirm whether you can find the state from which the business broker operates.
- Does the business broker give you information that doesn’t match the details that you find? For instance, the broker might claim that they have sold over 500 businesses—so is that the same information they have indicated on their page.
- Is the business broker a member of any reputable industry association like the IBBA (International Business Broker Association)?
This information can help you validate whether you are dealing with a genuine business broker or a scam.
Choosing an experienced business broker is very important. At the end of the day, the broker’s experience will determine the profit that you will get. So, it’s important to check for how long the business broker has been in operation. Besides, it’s good to confirm the number of deals that the business broker closes each year.
Such questions will help you determine whether the business broker does quality work, has ethical processes, and will represent you professionally. Moreover, if the business broker has sold businesses like yours, it’s an added advantage.
Any professional Orlando Business Broker who has sold businesses like yours before knows which challenges to anticipate and how to get the best deal out of the sale. However, that doesn’t mean you rule out brokers who are new to the industry. Such brokers are full of energy and motivation and are ready to prove to you that they can do a good job. However, they must have a reputable brokerage company behind them for them to be as effective as a seasoned broker.
Never ignore what their previous client says about the broker
Yes, you will need to see what comments that their previous clients have left on Google, as well as on their social media accounts. Furthermore, check to see if they have any testimonials from previous sellers and buyers. These details can give you valuable information about how the business broker conducts their business, and whether they satisfied their previous clients or not.
How does the business broker value businesses?
Any reputable business broker will give you a realistic value for your business. And why is this? Business brokers get paid when they sell a business. Therefore, it’s in their best interest to make sure that they value your business appropriately while pushing for the best possible price for the business. If the business is overvalued, it means it will have an unrealistic price tag, and it will take you ages to sell your business.
Therefore, it’s advisable to make sure that your broker explains to you how they value businesses. Determining the value of a business takes into consideration numerous factors. So, there is no one-size-fits-all formula for valuing businesses. If the business broker gives you a generic formula, and yet they haven’t factored in anything about your business, it shows how inexperienced they are. So, choosing such a broker risks getting your business over or under-valued, and this has a direct impact on the deal you will get, as well as the time it will take to sell your business. To ensure a smooth transaction, it is imperative to prioritize a legal review when selling a business, which helps identify and address any potential legal complexities or risks.
Hire a business broker who understands your industry, as well as its size
Every business is unique. However, businesses in the same industry, like two restaurants, have the same similarities as a logistics company. With that said, specialization is very important when it comes to hiring a business broker. So, you need to find a business broker who has:
- Experience in selling businesses in your industry
- Sold businesses in your area previously
- Sold businesses of your size
From marketing your business to the right buyers to understanding the financials, these three key factors play an important role when it comes to selling a business. So, you shouldn’t ignore them when looking for a business broker.