Tips for Selling Your Business With a Business Broker

A business broker is an invaluable partner for successfully selling your business. Here are 12 simple tips for using a broker to optimize your sale.

1. Have clear expectations. Know what you want and need, and discuss this transparently with the broker you select. Open, direct communication about your expectations is critical to a successful sale.

2. Get clear details about how the broker intends to advertise your business. They should have a sufficiently large budget for the sale to maximize chances of getting a highly qualified buyer.

3. Seek a valuation from the broker before you sign a listing agreement. Ask them whether a cash price versus a price with terms involved is more appropriate. In a market where more than 70% of small businesses fail to sale because of an excessively high price, the deal structure is a significant consideration.

4. If your business sale is confidential, you must know how the broker intends to protect the confidentiality of the sale. They must use a professional NDA or confidentiality agreement, and take proactive steps to prevent unintended disclosures.

5. Ensure the broker has the necessary skills to prepare your business to go on the market. Are your financial and tax returns comprehensible? Do you have all documents, such as leases and contracts, ready for review? Deals die when they take too much time. If your broker can’t help expedite the process, then they’re not doing all they can to support the deal.
   
   
6. Ensure the selected broker has experience selling your type and size of business. It’s not enough to pick a broker you like who has sufficient experience. They must be able to use that experience to benefit your business. Without sufficient experience in your market niche, that’s not possible.

7. Choose a broker who can timely respond to your needs. How quickly do they respond to phone calls? This is an indication of how quickly they will get back to potential buyers, as well as the kind of communication you can expect if you hire them.

8. Select a responsive, proactive broker. It bears repeating: time kills deals.

9. Continuous and constant communication with your broker is a must. Set clear expectation about the type and frequency of communication you expect. The communication schedule is ultimately up to you, but regular planning sessions are key to the success of your deal.

10. Choose a broker who has the time to take on another client. A busy broker might impress you with their client roster, but do they have time to add you to that list?

11. Get details about a specific timeline. The average business takes 6 months to 2 years to sell. A broker who runs the sale well and who gets some support from you should be able to sell most businesses within 6 months.
    

Ask for a clearly written, well-worded agreement. The contract should address all aspects of the sale, leaving nothing up to chance or verbal agreements. Have a lawyer you trust review the agreement before you sign on the dotted line. Getting everything in writing to set clear expectations.