Selling a business is a major decision that can impact one’s financial future and overall livelihood. Selecting the right broker to facilitate the sale is crucial in order to achieve the best outcome. There are several key steps entrepreneurs should take when choosing a qualified, trustworthy broker to guide them through this life-changing process.
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Know What You Want
When thinking about hiring a business broker, the first step is to be exceedingly clear on your goals. Do you want to sell your business? Are you looking to acquire a new company? Determining the specifics will help guide your broker search. After spending years building her company, an entrepreneur may now want to move on by selling their business. Before reaching out to brokers, they should make a list of must-haves for potential partners.
Do Your Research
With a clear understanding of your objectives, next comes researching brokers who focus specifically on selling similar companies. Take time browsing online profiles, looking for specializations and experience specifically in your industry. Coming up with a list of three strong candidates who have impressive track records selling businesses like yours ensures options. Taking referrals from people you trust will add a couple more options to the list. Doing this legwork before reaching out means a higher chance of finding the right broker.
Schedule Initial Consultations
Now comes meeting with potential brokers through introductory calls or meetings! This allows the business owner to share details while learning more about their experience and approach. Going into these consultations armed with thoughtful questions allows you to determine if the broker measures up. Consider hosting the meeting at your own office with a broker to get a feel for how they interact on your turf. After speaking to all candidates, a seller should be able to narrow it down to two frontrunners who genuinely understand your vision.
Compare Brokerage Agreements
Before making a final decision, ask the two top broker candidates to provide their specific brokerage contracts, which allows for a careful comparison of key terms and conditions. Reviewing details around commission rates, exclusivity, timeline, marketing strategies, and available resources helps weigh the pros and cons of each option. For example, going with a broker who offers a tiered commission structure that incentivizes them to sell at the highest possible price makes strategic sense for the entrepreneur’s goals.
Additionally, building accountability through agreed-upon marketing action plans and sale benchmarks gives extra assurance that the broker will remain dedicated to the success of the sale. Checking whether negotiations or potential mediation services are included could also sway the decision. Thoroughly evaluating and contrasting the proposed contracts provides that last gut check by illuminating pivotal differences between the two brokers under consideration. Making spreadsheets to compare fees, ideal sale prices, and projected timelines helps analyze the impact of contract terms. Consulting a lawyer can also help decipher fine print and ensure protections are in place. Doing this due diligence by dissecting the negotiated brokerage agreements grants essential peace of mind in making a well-informed, confident choice.
Trust Your Instincts
At the end of the day, listening to your inner voice holds power. The broker that stands out shows authentic passion for what the company offers. Thoughtful ideas on target buyer profiling display an innate understanding of both goals and values. And easy conversation indicates a partnership that could withstand inevitable bumps. While building accountability through contracts matters, finding a trusted broker makes one confident in the decision.