I’m clueless. How do I choose a business broker?
Monday, May 18, 2009/
Dear Aunty B,
I recently wrote to you about selling my food business. Now I am thinking of selling it, but I need your advice on considering a broker for sale.
I have spoken to a few brokers but I’m confused. Should I go for a broker who has only a few businesses on his selling list, so that he can give me more attention? Or should I use a well-known broker who may not pay me much attention? How do I choose a broker?
Please help me on this.
It is more likely that a broker with just a few businesses on their list is actually not a very good broker. And that a well-known broker is probably very good at his job and may well flatter you with attention. So not sure about your reasoning here.
But because I think you are barking up the wrong tree, I dragged in an expert in selling a business, Andrew Kent from BizExchange, for some advice.
He says when you choose a broker, these are the three key things to look for:
- How well they understand your business and industry. This will be critical to their ability to handle inquiries on your behalf, and to present your business in the best possible light. It will also provide additional credibility in discussions around the sale price. So ask what sales they have done in your industry.
- How well placed they are to attract the maximum number of buyers for your business. When assessing this you need to discuss with them how and where they advertise, how many buyers they already have on their books, and what sort of businesses these buyers are interested in – size, industry, location, level of management involvement. No point going with a broker with lots of buyers who are not interested in businesses like yours.
- Trust. Do you think consider the broker to be reputable? Do you feel like you are dealing with a professional adviser or a used car salesman? What impression would you get of your business if you were a buyer. One of the best ways to test this is to make a buyer inquiry on a similar business before presenting yours for sale. How happy would you be if they represented you in the same manner that they are representing the other business?
So there you have it. Approach the matter in an intelligent way and do your home work. It takes you time to build your business – and it takes you time to sell it!
Your Aunty B.
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