A Business Broker Can Help You Get The Best Deal When You Are Planning To Sell Your Business

A business broker is a firm or a person who assists buying and selling process of small businesses. If you are planning to sell your business, the right business broker can help you get the right price for your business of which it is worth.

A business broker is much more than just a middleman. Apart from exposing you to the vast pool of potential buyers of your business, most brokers also help in facilitating various transactions involved in the buying-selling process. Selling any business is a complex process and is extremely difficult to be carried out own your own.
Taking professional help will let you concentrate on your business till it is completely sold, while the broker will be involved in searching the right buyer for you. This will help to get rid of a lot of unnecessary worries.

Here are some reasons, why you should hire a business broker, if you are serious on putting your business for sale:

�The know-how of the market and current worth of a business is crucial before you try to sell your business. Business brokers are usually quite knowledgeable in this area and can usually derive an appreciably accurate value of your business.

�Business brokers know how to package your business the right way and present it in a manner that would attract the buyers.

�The database maintained by business brokers make it easier for you to find the potential buyers. If you find a listing in the �business for sale’ records of their database, a lot of buyers would be able to find you, if they are searching for something similar to what your business has to offer.

�Confidentiality is one of the most important aspects that a business broker provides to its client, so that the present scenario of the business won’t be affected and the rivals and competitors of the enterprise don’t come to know that the business is for sale.

�Business brokers are well equipped with the skills of converting seekers into buyers. For an individual it is very difficult to create competition among potential business buyers and competition is what fetches the best price in most cases.

�The whole process, as we all know is quite complicated and many a times requires compromises on the sides of both the parties. A business broker acts as an intermediary and makes sure that best deal occurs between the two.

Capital Business Advisors Co. — Business Broker, Washington Dc For Buyers And Sellers

There are many businesses currently running in today”s time. Small and medium businesses look for right opportunities to expand their businesses and get more customers all over the world. this can be done in various ways, and one of that is the merging and buying such small and medium sized businesses. this process may require some expert”s advice or consultation for secure and safe buying or merger, and the best company to get such information is Capital Business Advisors. it is a company established in 1989 by Jerry Cohen which works in providing proper consultation and advice to give all the buyers and sellers, and therefore, called as business broker in Washington DC.

Merging or putting business for sale, brokers are required to give the right advice and provide you correct amount on which the business can be sold for. during merging, there is a contract that states which partner will get what percentage of profit and how much capital will be invested by which partner. every detail is vital; therefore if you are indulging in such activity, ask these small business brokers for exact details. Capital business Advisors Company is responsible for providing consulting services for small or medium sized companies.

This business broker sale Maryland Company provides experienced staff and brilliant services for safe business transactions. they provide attorneys for clear consultation and the rules that need to be followed in business merger or buying or selling. they have certified public accountants and Chartered accountants with all the bookkeeping services. one of the most used services of this business broker, Washington DC is the financial advisor or planner that will provide information on the amounts that need to be paid or received. their services are further extended by business valuation. In this, they study your company, in and out, and provide estimated value of the business.

A business requires a lot of knowledge about law in Maryland and information before putting business for sale, Maryland. therefore, Capital Business Advisors provide strategic planning to sellers which includes succession, sale and exit strategies, so that every business transaction is carried on smoothly without any problem. the requirement for this planning is for saving tax during sale of business.

These small business brokers act as intermediates that give accurate advice regarding all the buying procedures. the buyers of the business for sale, Maryland are suggested to get professional help from this company to know the process and information on buying. these business brokers, Washington DC work for a minimal fees like for consultation, hourly fees is charged which is very reasonable.

Certified Business Broker For Right Transaction Between Seller And Buyer

It is always safe to depend upon certified business broker, since you can judge his job with credibility. There have been horror stories about business brokers doing round in the market about leaving the transaction at the last moment or running away after laundering all the money. There are few things you should look into a dealer, then only you can justify whether he is good or not.

Few things you should look

First, determine whether the dealer is certified. If yes, then you can rely on his expertise. Besides, you are assured that your business will be sold in safe hands. Assess whether the dealer you are relying upon follow principles of ethics. Make sure that he has achieved certified business Intermediary. Though possessing a degree does not signify that he has sense of ethics in him, but you can feel dependant to great extent.

Check out for references. This boosts great confidence in you. If you ask for references you will get some idea about the broker, you want to appoint. You may also call a few professionals in the area and ask about the appointed dealer. If people say good things about him then you are assured that your business is in safe hands.

It is difficult to judge a person with untrained eyes. Expect honesty from the dealer. However, it is difficult to judge honesty, but you can rely on it if you know how to do it. Rely on your gut feeling and try to assess whether you are getting vague answers for the questions you are throwing.

Check if the dealer is eager to sit down with you and answer to all your questions with accuracy. If that is so, then it is possible to rely on such a dealer in any case. You may also ask for the right samples from the pricing analysis of the broker. This will help you form some idea about the person with whom you are hooking up.

Besides, make sure that the dealer is quite knowledgeable and educated when it comes to making business valuation. The most successful way of selling a business right, is through making rightful valuation. Check if the dealer has good marketing ability and is able to market your business well.

The most important point to note above all is to determine the reputation of the dealer. You can justify this by taking feedbacks from market. Talk to people who have experienced transaction with the same dealer. Turn to positive results and you will definitely be able to depend upon the broker you have selected.

It is always safe to depend upon certified business broker, since you can judge his job with credibility. There have been horror stories about business brokers doing round in the market about leaving the transaction at the last moment or running away after laundering all the money. There are few things you should look into a dealer, then only you can justify whether he is good or not.

Few things you should look

First, determine whether the dealer is certified. If yes, then you can rely on his expertise. Besides, you are assured that your business will be sold in safe hands. Assess whether the dealer you are relying upon follow principles of ethics. Make sure that he has achieved certified business Intermediary. Though possessing a degree does not signify that he has sense of ethics in him, but you can feel dependant to great extent.

Check out for references. This boosts great confidence in you. If you ask for references you will get some idea about the broker, you want to appoint. You may also call a few professionals in the area and ask about the appointed dealer. If people say good things about him then you are assured that your business is in safe hands.

It is difficult to judge a person with untrained eyes. Expect honesty from the dealer. However, it is difficult to judge honesty, but you can rely on it if you know how to do it. Rely on your gut feeling and try to assess whether you are getting vague answers for the questions you are throwing.

Check if the dealer is eager to sit down with you and answer to all your questions with accuracy. If that is so, then it is possible to rely on such a dealer in any case. You may also ask for the right samples from the pricing analysis of the broker. This will help you form some idea about the person with whom you are hooking up.

Besides, make sure that the dealer is quite knowledgeable and educated when it comes to making business valuation. The most successful way of selling a business right, is through making rightful valuation. Check if the dealer has good marketing ability and is able to market your business well.

The most important point to note above all is to determine the reputation of the dealer. You can justify this by taking feedbacks from market. Talk to people who have experienced transaction with the same dealer. Turn to positive results and you will definitely be able to depend upon the broker you have selected.

Selling Your Business Can Be All About The Right Business Broker

Once you have made the decision that selling your business is the right decision, there are many steps to take and many more decisions to be made before announcing to the world that your selling your business. The first thing you need to consider is whether you will attempt selling your business yourself or whether you will appoint a business broker to do it for you. If you want to try selling your business yourself, you need to ask yourself a few basic questions and consider the following before appointing a business broker:

Do you have the right resources to create a good marketing strategy to get your business noticed?

Do you have the time or patience to handle enquiries while working, running your business and selling your business at the same time?

Do you have the experience and negotiation skills to navigate selling your business?

Do you know about the legal requirements to complete a successful sale selling your business?

Do you know where to find the right professionals to assist in preparing the right documentation needed for selling your business?

Do not be fooled into thinking that sales of Real Estate (ie property) are the same as business sales. They are in fact very different. Selling a house can be as easy as putting a “For Sale” board up in front of your house and placing a few ads in the local paper and a couple of websites then wait for people to come and inspect. Selling your business is more involved and is why a business broker can help.

How is selling your business different you ask? Well for a start when selling your business most vendors don’t want people to know that their business is up for sale. They could be worried that the staff will find out and start looking for other jobs before the new owners fire them. This will disrupt the business and possibly affect its value when selling your business. A business broker can assist with selling your business.

Most vendors don’t want their competitors knowing that they are selling. In fact the only people that they will want to know they are selling are the people that will want to buy it. But who are these people and how will you find them? You may be one of the extremely lucky few when selling your business that have already been approached by someone who has made you an offer that is too good to refuse. If that is the case CONGRATULATIONS! You have won the lottery of business sales. Be aware though that an offer is simply that. Have you qualified them? Do they actually have the interest AND the finance?

For the majority of the business owners out there, believe me when I tell you that selling your business is NOT that easy. You really do need a professional. Someone whose job and livelihood depend on selling your business and other businesses on a daily basis. How to separate the chaff from the wheat and find a true professional when selling your business. A business broker who will keep your best interests in mind when selling your business and TRY to achieve the best possible result. Always remember that YOU are always the one in control of the whole process selling your business.

At the end of the day when selling your business if you don’t want to sell at the price being offered by the purchaser, you don’t have to accept the offer. It is up to the business broker to find you as many prospective buyers as possible and try to get the best possible outcome selling your business. Your business broker should be working for you and selling your business as a business broker, not the purchaser, as you are the one that will be paying the business broker commission. It is very important to choose the right business broker to act as your representative and to make sure that business broker has the experience and know how to generate the required level of interest and to create the best possible exposure selling your business.

But how do you know what to look for in a business broker selling your business and making that choice, you ask? Well it is like any other decision in life where you put your trust in another person to do a job for you. To ensure that you find the right one, you need to interview a business broker for selling your business, just like you would do when looking for new staff for your business.

Has the business broker themselves owned a business before and personally been through the process of selling your business personally?

How long has the business broker been in the industry?

Has the business broker sold businesses like yours before, particularly in the recent past?

Does the business broker have testimonials from clients?

Can they explain the procedures they have in place to make sure your privacy is protected?

Don’t forget to ask for receipts for any money paid for advertising (this should be a TRUST ACCOUNT receipt) as well as a breakdown of how the money you pay to the business broker will be spent in selling your business.

Can they give you an accurate appraisal for your business in the CURRENT market?

Or are they quoting higher unrealistic figures just to win your business?

The emphasis is on accurate, as there have been many instances where the business price was greatly exaggerated to impress the vendor. Beware of business brokers who say that they already have people on their database waiting to buy a business like yours. Most often than not it is a ploy used by some to create a sense of urgency and induce you into signing up with them suggesting that if you don’t, you will miss out. If you want to test their honesty, offer to sign up for a 7 day Exclusive Authority only. This should be more than enough time for them to produce buyers. If they do not accept this arrangement it could mean that they were not being entirely honest.

Applicant tracking system

Good applicant tracking systems can help recruiters tremendously. These systems can also be extremely effective for smaller business without a human resources manager. With these systems it is easier to bring the best candidates to the top of the pile.

The main idea of these systems is to provide a location and database for hiring and recruitment efforts all in one place. The tracking systems help manage resumes and all information from applicants. There are several methods to get the information into the software. For example if the human resources manager or a recruiter is interviewing the information can be entered and notes made as the interview is going on. The applicants that apply on line would have the option to enter the information right into the system. The third way data on prospective applicants could be entered is through resume boards.

Once an applicant tracking system has the information the system can sort this information in any number of ways. For example, if this position requires a college degree it can sort out any resume that may have come in that does not list that information. Most applicant tracking systems also offer employee referral rewards.

If your job is recruiting for your company or for many companies applicant tracking systems are certainly something to consider. The question is will the software make finding the best candidates for the opening you are trying to fill easier. The next question is will the recruitment software allow the very best candidate for the job through the screening processes it puts resumes through Applicant tracking system.

How To Optimize And Build Value In Your Company For A Planned & Successful Exit

Someone once said, The best time to start thinking about your retirement is BEFORE your boss does!” Sage advice, wouldn’t you agree? Yet, it is estimated that seven out of ten closely held business owners spend little or no time thinking about the value of one of their largest retirement assets: Their business!
Regardless of the number of years in business, whether you are the only employee, or you have hundreds of employees; one thing is true for all business owners. You will exit your business someday. Will your years of invested time and money return a significant financial reward at the time of your exit? The answer to that question depends upon whether or not you are paying attention to some very important aspects of your business right now.
I have read articles suggesting that between now and the year 2015, an estimated three trillion dollars will change hands as the torches of business ownership are passed to the next generation of entrepreneurs. How much of that three trillion dollars will belong to you? Ask yourself another very important question: Is my business positioned to adequately provide for my family and me if I need to leave the business unexpectedly during the next year?” Will you control the circumstances of your exit? Or, will the circumstances of your exit control you?
How do you go about preparing your business for saleand keep it ready for sale? A great question for which there is no single solution. Here are some good points with which you should become familiar:
Paying income taxes in the three to five years before you sell your business is a good thing. Most business owners do everything possible to show the business is NOT making money. But, if your tax returns are showing small to no profits…it may be very difficult for a buyer to convince a lender to lend money on the purchase of your business. Don’t be tax-wise” but value-foolish” when you KNOW you are going to want to sell your business in the next couple of years. Report all income and stop running all the personal expenses through your books.
Have a qualified and licensed CPA prepare your tax returnsrather than an unlicensed bookkeeper. Avoid having business returns prepared by the store front tax preparation firms. Many of their employees are only part time tax preparersand not experienced business tax consultants or preparers. Your prepared returns must show credibility. No credibility on tax returns often equals no sale of the business (or at least no sale for a good price).
Have a certified public accountant prepare (at minimum) a compiled financial statement for your business no less than once per year. A buyer for your business (and the buyer’s banker) will have much more confidence in the numbers and the business, knowing that you cared enough about the business to do things right. This can add value to the business.
Ask your CPA to prepare a special supplementary statement to your annual financial statement: Statement of EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization). The EBITDA is often what bankers and other financial analysts look at when determining the health and value of your company. It is far better for your accountant to prepare these annuallyso they can be reviewed by bankers and other advisors, than to force the bankers or other advisors to attempt preparing a statement of EBITDA for your business. And, many times buyers will actually make offers on businesses at some multiple of EBITDA. It is much better to give the EBITDA number to themthan have them try and come up with it on their own.
Prepare and maintain internal organizational chartsshowing the levels of management from the top down. This will easily assist a qualified buyer to understand your organization (it takes away some of the unknownsthus reducing perceived risks associated with the business). The greater the perceived risks associated with your businessthe lower the price.
Does your company have operating manuals for business operations? If not, consider preparing them and keeping them updated. I have seen businesses actually sell for a premium because the owners had complete operating instructions for the business. Sound too far out? It’s not. Why do you think franchises are so popular (and bought by willing buyers)? The documented operating systems remove certain risks associated with the operations of the business. You can do the same thing for your businessand increase the value of the business.
Learn about and measure the six key elements of your business (every business has these components):
1.Liquidity of the Business
2.Profits and Profit Margins
3.Sales Trends
4.Borrowing
5.Assets
6.Employees
When was the last time you had a Financial Performance Review of your company? The six key financial and operating elements of your business should be measured every year and compared to other similar sized companies (a peer group) within your industry. If your CPA firm does not do this type of management consulting, find someone who can perform this important task for you. If your company does not compare favorably to your own peer groupthis is a strong indication that the current value of your company is not up to par. By knowing exactly in which aspects your company is sub-par, you can make changes that will improve profits, performance and the value of your company. Your financial management consultant can give you tips and other helpful suggestions for improving your company…and its value.
Don’t think that you have all the time in the world to begin preparing your business for sale. We are all granted only a specific period of time to be here on this earth. When is the best time to begin preparing your business for sale? The very day you open the doors. If you are like most business ownersthat hasn’t happened. But it is never too late to start. From many years of experience as a CPA and a Business Broker, I can tell you that once you begin looking for ways to increase the value of your companyyou will also discover how to immediately improve your profits. And, increased profits will add to the value of your company.

I hope these points of consideration help you to organize and clarify your thinking. One of your most valuable assets may be your business. Why not spend a little more time and effort to add value to an asset you already have?

What Separates the Good Business Broker From the Bad?

Over the years, I’ve heard a million horror stories from business owners about their experiences with some of the “fly by night” business brokers out there. It’s always the same names and it always makes me wonder, “How did you get hooked up with these people? Why did you hire them?” I mean, I’ve seen some of their work and it’s TERRIBLE!

So, of course I feel bad for the business owner and I begin to question my ability to market my business brokerage services. If only I had been there first. If only these folks knew to call me or one of the other good credible brokers out there rather than the yahoo they ended up using. Yes, you heard me right; there are a lot of good credible business brokers out there. The problem is, there are a lot of bad, unqualified brokers out there as well. I’m in the business so it’s easy for me to tell the difference. But how can you, as the business owner, tell the difference?

Well, that’s a tough question to answer but I’ve been giving it some from thought and I’ve decided that the most important factors that separate the good business brokers from the bad are:

1. Ethics – most horror stories I hear are a result of a lack of ethics by the broker. This is unfortunate and disgraceful in my opinion. Unfortunately, there’s no easy way to test a broker’s ethics. My best recommendation is to make sure they’ve achieved their CBI (Certified Business Intermediary) designation from the IBBA (International Business Brokers Association). All CBI’s agree to adhere to the IBBA’s Standards of Professional Conduct and the Code of Ethics. I know acceptance of a code doesn’t guarantee anything, but it’s a good start. The second thing I would recommend is to check references. This can be tricky. Like any good job applicant, when you ask for references you will get handed the happiest and most satisfied clients that the broker is confident will put in a good word. So, to me this is a waste of time. Instead, why not call the other professionals in your area. It takes more than just the broker to do a deal. It’s takes an accountant and attorney as well. Call your accountant, have your friends call their accountants, same with your attorney and their attorneys. Not all accountants and attorneys will be close to the transaction marketplace (they tend to specialize) but they will ask around. Chances are they probably work with, know of, or went to school with another accountant or attorney that is involved in transactions. If you’re willing to put some time into checking credentials, sooner or later you will find your answers.

2. Candor / Honesty – Again, this can be difficult to judge for the untrained eye. But, what does your gut tell you? Are you receiving vague answers to your questions? Or, is the business broker you’re interviewing willing to sit down with you and answer every question that you have to the best of their ability, sometimes going above and beyond? If this is the case, usually it’s because they have nothing to hide. And, as a result, don’t have to tiptoe around your questions.

3. Pricing Ability – Being open, honest and ethical is only part of the game. It’s equally as important that the business broker be educated on matters of business valuation. One of the most important factors in selling a business is pricing it right. A mispriced business will either never sell (if overpriced) or fly off the market (if underpriced). Both situations are bad news for you as the business seller. If it’s overpriced it will sit on the market, get stigmatized and be difficult to sell even with a different broker. If it’s underpriced you will not maximize your retirement money. Make sure you ask the business broker you are interviewing if they know how to price a business. Moreover, make them prove it. Ask them to explain the three different approaches to value (Asset, Income and Market). If they don’t know what you’re talking about, RUN!! Ask for samples of the broker’s pricing analyses. Don’t settle for a broker that answers, “I can’t provide that it’s confidential”. Every broker can cleanse some samples and make them generic. Take them home. Review them, see if you would buy the business they present to you. Show it to your accountant and your attorney. Get their thoughts. If you’re not sure whether you’re looking at quality work or not, chances are your accountant or attorney will.

4. Marketing Ability – Remember at the end of the day, your small business is a non-marketable entity. You can’t go online, click a button and get rid of it. Someone has to actively create a market for your business. Ask the broker you are interviewing, “How do you plan to market my business?” Sit back and listen. If all they say is, “I’m going to post it on the internet,” RUN!! You can post it on the internet. For the fee the broker is taking, make sure they’re adding value. Dig deep on this subject. You won’t need to be a marketing guru to determine if the broker has a developed process that works.

5. Reputation – Part of investigating the reputation of the broker is requesting references. Not only client references but asking around for input and insight from other professionals about what business brokers they know and what they know about them. Also, go to the broker’s website; go to industry sites such as http://www.ibba.org. Look up the broker; see what other people are saying about them. Do the TV, newspaper, radio and trade publications value the broker’s opinion? It’s not easy to get quoted in articles, written about in papers, invited to be a guest on TV or radio shows. Professional media outlets do their homework. They can’t afford to put their name next to a non-credible source. A business broker that is taken serious and considered a credible source by mainstream media deserves consideration. Credibility is not bought, it is earned.

6. Courtesy / People Skills – Take the time to interview the broker in person. Never hire a business broker without meeting them. If they’re not willing to take the time to meet with you, chances are they won’t put much effort into selling your business either. Once they’re in front of you, see how they interact with you. Are they personable? Do you trust them? Are they friendly? Are they educated about your business and the business brokerage industry? Make no mistake, this is a people business. People buy from people they like. If you don’t like the person you’re interviewing, chances are neither will a potential buyer for your business.

7. Education / Experience – Business brokers are professional service providers, like accountants, attorney, financial planners, etc. Make sure the person you hire to sell your business (or help you buy one) continually invests in their own education and professional development. Would you hire an attorney that doesn’t keep up with current laws? Would you hire an account that isn’t updated on the tax code? Your business is the largest and most valuable asset that you own. Make sure the person you hire to turn it into cash is someone that stays current on industry trends, government regulations, new pricing methodologies, marketing strategies, etc. Business brokerage is a full time profession. If your broker doesn’t invest in their own professional development, chances are there’s someone else out there that does and will do a better job at selling your business for the highest possible price.

The suggestions above are not fool proof but, they will get you pointed in the right direction. Don’t take the sale of your business lightly. Make sure you do your homework. If you do, the wheat will quickly separate from the chaff.

How Important Is a Business Broker to Buyers and Sellers?

Establishments and companies change ownership at some point. As such, the services of business brokers prove to be highly valuable for both the seller and the buyer. An aspiring entrepreneur needs to evaluate a target business establishment, and this is where a professional business broker can offer valuable assistance. The seller also will find it rewarding to seek the assistance of a business for sale broker for the advertising and the negotiation facilitation with prospect buyers.

Benefits of Hiring Business Brokers

Selling a business can be a demanding and tiresome process. This can take up a lot of time and can even affect the value of the business, as you spend more time on its sale process rather than on the daily operations of the business. This is where the services of business brokers come in handy.

First off, a professional broker can give you confidentiality, and can assure you that only the prospective buyers you approve will be contacted. A trustworthy and experienced broker can save you time in screening prospective buyers in advance. Brokers can already check if a prospect buyer has good financial resources to buy your business. They will also ask buyers to sign a confidentiality and non-disclosure contracts. If you attempt to sell your business openly or independently, you would most likely damage your staff’s morale. You would also give your competitors the opportunity to spread damaging rumors about you and steal your valued customers. When you hire a business for sale broker, he can work anonymously, ensuring the protection of your business.

Moreover, selling your business all by yourself can be inefficient, especially if you lack the experience. A business broker generally has more experience, resources, and tools to effectively reach potential buyers faster and easier. However, reaching target buyers is just one part of a broker’s job; getting the best price for your business is his other important job. A professional broker should have the capacity to advertise your company in such a way that it can attract serious and financially stable buyers. This would definitely increase your benefits and advantages in selling your business.

Finally, business brokers can name the value of your business. This process involves more than just revenue or profit, thus, you may undervalue or overvalue your company, and these mistakes bear indicative consequences. For an experienced business broker, there is a rare chance to commit such mistakes.

From a business buyer’s perspective, a business for sale broker brings a lot of advantages as well. If you are a buyer and asked the assistance of a broker, you will be able to have access to opportunities that you won’t likely find on your own. If you do not have enough knowledge regarding the industry you chose, you can get helpful advice and useful insights from a good business broker. Your broker can also facilitate other essential tasks such as researching recent market conditions, current prices, and reasonable financing.

Trusting only Certified Business Brokers

With the increasing number of sale brokers out there, you may face challenges identifying which ones are trustworthy and which ones are bogus. To resolve this dilemma, all you need to do is check their certifications and experiences. The main organization that provides business broker certification opportunities is the International Association of Business Brokers (IBBA). A certified business broker should have at least one of these designations:

– Accredited in Business Valuation (ABV)

– Certified Business Appraiser (CBA)

– Accredited Senior Appraiser in Business Valuation (ASA-BV)

– Certified Valuation Analyst (CVA)

Although a certification may be a good sign that a business broker is legitimate and trustworthy, it does not fully guarantee his competence in the field. The broker’s practical experience is also an important aspect to consider in choosing which one to trust. Do some research or ask around for the number of transactions that your prospect broker has successfully closed, as well as some positive feedback regarding his experience in the industry. An insightful business broker can benefit a lot from his or her experiences, such as building significant relationships within the industry and learning from past mistakes. Certification cannot match such benefits and advantages.

While certification is a vital requirement in establishing a broker’s credibility, you should always take into account the experience of a business for sale broker before making a decision. Choose one who has the knowledge and experience that you will not get anywhere else. Don’t you agree that the role and importance of business brokers is essential to both business sellers and buyers?

Make sure you do your research before buying a franchise or any business. GlobalBX.com is a FREE business for sale listing exchange that provides a confidential forum with over 46,000 business listings, complete business broker and business lender directories, as well as comprehensive information for all entrepreneurs. Check out GlobalBX today!

Business Brokers – How to Choose the Right One

The vast majority of small businesses are sold without the assistance of business brokers.

But if you do decide the hire a broker, here are some suggestions on how to pick the right one and how to structure the agreement in your favor.

What Business Is The Broker Actually In?

In many states there is no training or certification needed to become a business broker. In other states, brokers are required to hold a real estate license.

In these states it’s common to find real estate agents that do business brokering as a side business. If you deal with a broker who is also a real estate agent, make sure that being a business broker is more than just his hobby.

You will pay a pretty penny for the broker’s expertise and experience – you should make sure they have that experience when it comes to selling businesses and not just experience selling houses.

Questions To Ask

If you hire a broker you will be working with them closely for months to come; they will have access to your most confidential business records; the amount of money you put in your pocket at closing will be influenced heavily by the quality of work they do.

Therefore, you absolutely must check them out.

Here are some questions you should ask any prospective broker before hiring him:

1. How long have you been a broker?
2. Have you ever owned a business?
3. How many businesses similar to mine have you helped sell?
4. Can I see a blank version of your Listing Agreement?
5. What percentage of you income comes from brokering and how much from real estate (If applicable)

Ask them to provide you with references from previous clients. Then, I suggest you do something very unusual: Actually call the broker’s references!
I know a lot of people ask for references just to see how the person will react when asked (and to see if they actuality have any). But you can learn a lot about the broker’s reliability and professionalism by talking to people who dealt with that broker when they were in the exact same spot you are in.

Business Broker Fees

There are two benefits a broker can provide the business seller. First, he can locate potential buyers while maintaining the seller’s confidentiality. And second, a broker will qualify these potential business buyers so the seller saves time by not having to deal with weak prospects.

The big negative of dealing with a business broker is his fee, which averages 10-12% of the sale price. This fee is charged to the seller.

There is also a minimum fee. A very small business will pay a flat amount, typically $8-$10,000, instead of the commission. For a business worth $50,000 this minimum fee actually works out to be a higher percentage than the 10-12% industry average. But as a matter of practice, brokers usually won’t be interested in your business unless the asking price is above $100,000.

These fees are the reason most business owners choose to sell their business themselves and rely on their lawyers and accountants for the professional assistance they need.

The Broker Agreement

If you decide to use a broker you’ll be asked to sign a broker agreement which will detail the his fees. If possible, have your agreement include the following clauses:

Timing of Payments – Have it written into the agreement that the broker’s fee will be paid at the time you receive the purchase price – not at the time the sale is closed. This way, if you finance part of the sale price over a number of years, you pay the business broker as you get the money, not all up front.

Length Of Agreement – Your listing agreement should be for a limited time. If the broker locates the buyer within that time he gets paid. Be careful of lengthy agreements that lock you in with one business broker for more than 6 months. If he doesn’t produce, you want to be able to try other options. A 6 month business broker agreement is the longest you should allow. However, because selling a business can be a lengthy process, 3 months is usually too little time for the broker to find the right buyer. Try to settle on something between 3 and 6 months. If after six months, you haven’t closed the deal but you think the broker has done a good job, you’re always free to extend the agreement. But you want to be free to decide on an extension 6 months from now, not today.

Broker’s Guarantee – Include a paragraph stating that if you find the buyer, you don’t have to pay the commission. Without this clause, the broker is usually paid no matter who locates the buyer. Before signing any listing agreement, it is best to have your attorney review it to make sure your interests are protected.

Choosing the Right Business Brokers

Whether you’re buying or selling a business, having a broker on your side can make the difference between a successful outcome and a nightmare. However, not all business brokers will be suitable for your specific situation. Use the tips below to choose the right broker for your needs.

Start by asking for referrals from your inner circle of business advisers and colleagues. Have any used a business broker in the past? Were they satisfied? Does the broker handle the type of transaction you have in mind?

You may need to widen your net to find a pool of qualified business brokers that specialize in brokering deals such as yours. Once you have several potential brokers, it’s time to get down to business and narrow the field down. Below are several key factors to consider:

– Is the individual or firm professional? Professionalism shows in numerous ways including personal appearance, the presentation of marketing materials, website, language, mannerisms, and expertise. Use both objectivity and your gut instinct. Remember, the broker you choose will be representing your business so make sure you’re fully comfortable with the person and firm you choose.

– Does the broker have experience working with businesses like yours? While it’s not necessary for the business broker to have specific experience in your exact niche, it’s helpful for the broker to understand the nature of your business and have experience brokering deals with similar characteristics. For example, if you run a family-owned microbrewery, a broker with a successful track record brokering deals for small wineries, family-owned specialty food manufacturers, or small brewpubs may not know the finer points of brewing beers but could be an excellent choice thanks to experience with similar businesses.

– What qualifications does the broker have? Look for licensing, education, certification, experience, and membership in professional associations.

– Is the broker well prepared? In other words, did the business broker do his or her research prior to your initial meeting? Brokers use comparable sales, business and industry reports, and other tools to price businesses. Your business broker should be able to support any suggested listing prices, which should be presented in writing, with documentation.

– If you are selling your business, find out how the broker intends to market your business. Brokers have many marketing tools available to market their business listings. However, some prefer to use specific marketing techniques over others. Make sure to ask the broker to present a detailed marketing plan.

– What type of businesses does the broker work with? For example, if your business has annual revenues in the $50 million range, you’ll need a special type of buyer making it important to choose a business broker capable of attracting those high net worth individuals and investors.

– Check references. No matter how professional, personable, experienced, qualified, and prepared potential broker appear, cover your bases by checking references. Ideally, the broker should give you references from businesses with similarities to yours.

Choosing the right broker to sell your business or help you find a business to buy is a process. Do your part to ensure a successful outcome by choosing wisely.