Factors To Consider When Choosing A Business Broker
There comes a time when your business grows and you have to sell it for you to move to your next chapter in life. It may tempt you to sell your business on your own. You will need to hire a reliable business broker. It is not easy to pick the right broker. Read on to get tips to help you settle for the right business broker.
It is important to consider a business broker with experience. Consider the number of years they have been in business. It is also good to know how many deals they have closed yearly. This will help you know if they are reliable.
It is a plus to select a business broker who specializes in your kind of business. This shows that they are able to deal better with the challenges that arise and close the deal within the given time. Also, you can find a broker who is newer in the industry and give you good representation provided they have a reliable company behind them.
You need a business broker with the right credentials. They need to be licensed. They need to also be part of organizations. This will give you an idea of their involvement in the business world. They also need to be connected with other professionals such as accountants, bankers and attorneys who can play a role in selling your business.
Also, choose a business broke who is responsive and open. They need to listen to you. This is for them to know your goals. Keep in mind that it can take time to sell a business. Be ready not to get good news for weeks on end. You need to decide on how often you should be communicating.
You also need to be careful about generalists. You need to be sure that you select a broker that is fit for your business. Size also matters a lot. A broker who is used to handling transactions that are worth tens of millions of dollars will not give you the attention you need if your business is just worth about a million dollars.
It is important to know in advance what the process will entail. You need to know how to value the business and follow through. You need also to discuss with the business broker how they will keep you appraised on transaction status. The business broker needs to provide you with weekly status reports and updates.
Business brokers rely on commission. A broker who asks for money upfront is not genuine. They usually charge a 10 percent commission. However, the figure can be negotiated. Make comparisons of rates of various brokers for you to choose one who is affordable.It take almost a year to sell a business so expect to have a long relationship with the broker.If they don’t show you the potential to sell your business, choose a different broker.