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Regardless of your exact reason, you may have thought about selling your business after having had to deal with both its ups and downs for quite some time. However, you wouldn’t want to make yet another mistake that can further ruin you financially by attempting to sell your business on your own. What you would want to do instead is to hire the services of a broker who would act as an intermediary between you and any prospective buyers of your business. Getting the wrong broker can be an equally costly error on your end too. Therefore, you should ask the following key questions to a broker before making any final decisions concerning the sale of your business:
1. How many years of experience does the broker have when it comes to selling businesses similar to what you have?
As much as you might want to initially give a broker who’s completely new to selling any sort of business a fair shot at doing so, it can cost them too much time and you too much money to even make a successful sale. Thus, you would want to hire a broker who already has a solid background when it comes to selling businesses like yours.
- A successful business broker has already built various connections with buyers and has extensive knowledge regarding the nature of your business as well as others like it.
- But in case you strongly insist on giving an inexperienced broker a chance, you should ask the owner of the brokerage firm where they’re working to accompany or simply guide them from start to finish as they try to sell your business.
2. How many listings does the broker currently have?
- If you’ve come across a business broker who has less than 15 active listings, you might want to gently ask them first why that is so. In case all they can muster is between only three to seven active listings, you shouldn’t take it negatively; in fact, it might even be a good sign that they’re more than willing to take their time in selling your business.
- You should stay away from a business broker who has only one to two active listings as it may indicate a lack of motivation on their end to acquire more listings.
- On the flip side though, you wouldn’t want a business broker with more than 20 active listings as they may not be able to handle the sale of your business as efficiently as possible since they have their hands full with other businesses to sell.
3. Is the broker working from home or in an office?
Although there’s absolutely nothing wrong with hiring a business broker who’s working from the comfort of their own home, you might want to either ask them why they chose that work setup for themselves or choose one who works in an office instead.
- Some business brokers who work from home might not be treating selling businesses as a full-time occupation. The sale of your business might, therefore, suffer as a result if you decide to push through with letting a home-based broker handle it.
- However, you might want to give fair consideration to a business broker who’s working from their home if they already had years of formidable experience in selling businesses similar to yours but had to scale back their entire operations for whatever valid reason they may have.
- On the other hand, a business brokerage firm usually sets itself up in a physical office location with a team of brokers under its employ, which gives off a more professional image that any prospective buyers of your business would want to deal with more often.
Whatever your reason may be for wanting to sell your business, you shouldn’t try doing it all by yourself. Instead, you should entrust the sale of your business in the hands of a broker who can do it for you. However, you can’t let a bad broker sell your business as they might leave it up for sale for far too long and even cost you money while at it. Thus, when hiring a business broker, the same if you were hiring a mortgage broker, you should ask the above-listed key questions to them before making any final decisions about selling your business. Brokers here can be your helping hand when it comes to managing certain aspects of your business, or even a mortgage, if need be. After all, you can’t afford to fail yet again before parting ways with your business as it gets bought by somebody else who can manage it better.
Jordan is a professional finance, business and Australian expat home loan expert who specializes in loans and other key areas of business. Jordan works hard to research and find the best business solutions for clients to ensure the very best results. In his spare time he enjoys spending time with his family and friends.