Tips for Finding the Right Business Broker

You’ve decided to sell, and are ready to put your business on the market. In almost all cases, the right broker is an invaluable partner for finding the right buyer and supporting you to develop a sage exit strategy. The right broker can maximize the final sale price. The wrong broker can leave your business flapping in the wind for months or years, or urge you to accept a sale price that’s far too low. Don’t let this happen to you. The following tips can help you find a broker who will make the sales process as smooth as possible.

Know the Traits of a Superstar

The business market is littered with mediocre brokers looking to make a quick buck. The best business brokers share a few traits in common:

• Specialized experience. Quality brokers specialize in specific types of businesses. So find someone with experience working with businesses like yours, and who has connections in your industry niche.
• Demonstrable success. Quality brokers should be able to rattle off a list of satisfied customers, and provide numerous references. Ask your broker for references, and then do your own digging. What do others in the business world think of this person? If the broker is as good as you hope, you’ll be able to find at least a few people who have heard of and respect them.
• Connections. Sales depend on connections. The right broker can’t do it all alone. Instead, they have industry connections both to potential buyers and to people who can support a successful sale.
• Honesty: Pricing is the single most significant barrier to selling most businesses. Yet many brokers are reluctant to tell their clients the truth, which is that they have overvalued their business. This can lead to a sale process that’s doomed to failure, which drags on for weeks or months. A great broker tells you the truth—not just what you want to hear.

Finding a Winning Broker

So where do you begin your search for a superstar broker? Some fertile sources for referrals include:

• Local referrals: People in your industry and geographic region may know the best brokers for your needs. Look at business listings to see who’s listing them, and then discreetly verify their credentials.
• Financial and legal experts: These are people who regularly work with brokers. They know who’s good and who’s not. So seek out the advice of other members of your business selling team.
• Online directories: Not all broker directories are screener or reliable. But a little research can direct you to reliable directories that can help you locate a winning broker.
• Local organizations: Your state’s economic development office or local Chamber of Commerce are experts in business. They know who’s for real and who’s for not. Ask them for a list of recommended brokers, or see if they can refer you to others who have recently sold a business with a broker.
• IBBA: The International Business Brokers Association is committed to establishing and enforcing professional standards among its members. IT offers a website to help you find IBBA brokers in your region. A broker designated a Certified Business Intermediary has additional expertise and training, so consider narrowing your search to focus only on professionals with this designation.