There are many successful entrepreneurs who have a hard time selling their business when they want to shift lines or just retire. It gets very hard for serial entrepreneurs. So, then there are business brokers who help with this. But getting someone who is trustworthy and can help with getting useful leads can be pretty tough. There are numerous entrepreneurs who have learnt it the hard way and here are some tips on picking a worthwhile business broker right from the horse’s mouth:
1. Watch Out for Generalists: It’s not enough to just Google brokers and make a couple of calls to their references. It is important that you know your broker is the best one for your business. For beginners, you must start with a broker who is good with specializing in selling business of your specific niche – whether it’s a website development firm, a restaurant or a photography studio. This is because every industry has its specific requirements, culture and knowledge base and a broker who says ‘industry doesn’t matter’ will not be able to an effective enough job.
2. Experience Makes a Difference: You should look for a broker with a good resume and not just someone who works out of a garage. You can check with the International Business Brokers Association for credentials of the broker you are considering. You can also look for IBBA sanctioned brokers as well.
3. Size Can Matter: You should also check if the broker you pick handles the size of the business that you are looking to sell. If the broker handles mostly deals costing over $30 million and your deal costs around $5 million, then the broker is not going to give you the attention you need.
4. Process Needs to Be Managed: You must get a good picture of how the deal will be processed. Ask about how they want to value the business, preparing the business for sale, looking up for potential buyers and following up with them. You should also make sure the broker will keep you updated about the interested prospects and about the transaction status. You must ask about weekly calls, reports, and updates.
5. Over-Committing Must Be Avoided: The relationship with your broker will sure be a lengthy one. It usually takes at least 9 months to 12 months for a business to sell – this is taking into consideration the time the broker and you begin to assemble a practical marketing package for the business right till the time the sale is done. You can login to https://www.businesses2sell.com.au for more information.
6. Trust your Intuition: You must make sure that you hire someone you can trust and also someone who is compatible. You will need to work well as a team and have some good work chemistry. You and your broker must work as a partnership in order to sell the business.
7. Talk about the Fee: Usually, business brokers make their income by earning a commission by selling your business. If you are asked for money right away, then that is a warning siren and you must know that this isn’t the common protocol. The average commission is generally 10%.
These tips are sure going to help you pick the apt broker to sell your business; just make sure you pay attention to your intuition as well.
Bio: This guest post has been contributed by Nelson Joseph, a business broker who also has a passion for blogging and educating people.