There are a large number of brokerage firms and hundreds of business brokers nationwide. You need to know what to look for before engaging a business broker to represent you and deliver a win-win outcome for all.
Just as a buyer would conduct due diligence before purchasing a business, you should consider doing something similar on the business broker you intend engaging.
So what questions should you ask? Â
Here’s a list of 17 essential tips before engaging a business broker:
- Ask if they’re licensed in your state
- Ask to view their personal licence
- Cross check the licence number with the Office of Fair Trading in your state
- Check where the brokerage’s head office is
- Establish whether the brokerage is an accredited Real Estate Agency
- Establish how long the brokerage has been in business
- Ask what type of licences it holds and in which states
- Ask for the principal’s details and to speak or meet with them
- Ask if you can come to their head office to be shown how they operate
- Determine if the broker is a specialist and request details of their experience
- Ask what similar businesses they have sold
- Ask them to explain to you, or preferably your accountant, their methodology for your business’s valuation
- Establish what level of service you can expect from the broker
- Confirm how frequently you can expect communication
- Ensure it will be the same broker throughout the sale process
- Ask to have the process explained from start to finish and
- Discuss your options to list your business with your solicitor or business advisor.
If you adopt these 17 essential tips before engaging a business broker, you can rest assured the small investment of time will give you comfort and peace of mind as you advance through the sale process.
Ian Salter – Senior Business Broker
Benchmark Business Sales and Valuations
