Choosing A Business Broker
Would you like to steer clear of hiring a business broker who is inexperienced? Actually, you have to ask important questions in order to ensure that you will not end up working with bad choices. Following are things that you have to watch out for when getting such service.
Number 1. Experience
As a matter of fact, you have to go only with professionals who have proven resume and track record. You may contact the IBBA or International Business Brokers Association to be able to learn more about the credentials of what makes a good business broker. In addition to that, if the professionals likes to be IBBA, they need to provide years of experience on the job on top of classroom hours.
Number 2. Beware of the Generalists
If you think that you could read up on good brokers by just searching online, you're right but, it isn't enough. What you have to do is to ensure that your prospect is the best fit for your business. If you're only starting out, then you have to look for professionals who have lots of experience working for the kind of business that you are operating. Working with generalist isn't a great idea.
Number 3. Size Matter
It is important as well to learn about if the business broker is capable of handling big transactions. For example, if they typically handle deals worth 10 million dollars and your deal is only 3 million, then you will not likely get the attention you deserve from these experts. For further details regarding the benefits of business brokers, check out https://www.youtube.com/watch?v=RmSdlR2vFU8.
Number 4. Negotiate for a Fee
Normally, brokers are charging a commission for the service they offer. So, if the professional is asking you for upfront payment, then it is automatically a red flag. While average commission being charged by these brokers are 10 percent, you may still be able to negotiate for it. For example, if you know someone who proves great for your business, then you have to learn how to negotiate for a lower rate.
Number 5. Do not over commit
You'll be having a long term relationship with business brokers. On average, the broker might take between 9 and 12 months before selling your business. The broker might even assemble for a solid marketing package every now and then. While the broker might ask you to sign for an exclusive contract, you do not need to sign the contract for a year or more. Minimum length for such contract must be at least 6 months. Some people are negotiating for a 90 day contract and have it renewed for another 3 months. Know how to sell a business here!