Business brokers are essential in helping small business owners sell or buy new businesses, and many who use them agree that they can be invaluable.
However, not all business brokers offer the same services and experience, so it’s important that you choose the best one for your business and goals. After all, a good broker is only as good as their final selling price! Keep reading for our tips and tricks on how to choose the right broker for you.
What does a business broker do?
A business broker is someone who helps facilitate the sale or purchase of a business, acting as an intermediary between buyer and seller. They can help you negotiate your terms and take some of the stress from you during the process, making sure everything runs smoothly for the entire transaction. Sales can often take between six and 12 months, so a broker can be a comforting reminder that everything is still working, albeit slowly.
Brokers will offer a range of services such as business valuation, marketing, buyer screening, and negotiations. They’ll get your business ready for its sale, advising you on any areas of improvement before listing it so you can make the most of your sale without losing money on things that could’ve been fixed beforehand.
Some people get confused between the role of a broker and other professionals like lawyers and accountants. A business broker is not there to substitute for these other professionals, but rather work alongside them to keep the sale structured properly and moving at a reliable pace.
Choosing the right broker for you
So you’ve chosen to use a broker – smart choice. But with so many organisations out there, how are you to know which you should choose? Let’s take a look at some pointers on how you can choose the right broker for you:
1. Past experience
Experience is crucial when it comes to choosing your broker because you need someone to bring their wealth of knowledge when you’re lacking in the topic. Even if you’re familiar with selling a business and its process, it won’t hurt to have an experienced broker on hand to work alongside you during this process. Inexperienced brokers might not have enough knowledge to supplement yours, leaving you both unsure of what you’re doing.
Another thing to look for is a track record of success in selling similar businesses to yours. Make sure you ask potential brokers how many and the types of businesses they’ve helped in their career, and you can even ask to see references from previous clients if you’d like.
2. Professionalism
Professionalism goes hand in hand with past experience, but we’ve included it here too because it’s essential that the broker you choose has all of the necessary qualifications and credentials to act as your broker. The more credentials they have, the more past experience they can help you with.
Again, asking to see past referrals and testimonials can help you determine how professional your potential brokers are. Look out for words like honest, ethical, and trustworthy in past testimonials. We think how your broker responds to being asked to see references is also a good judge of character because if they get annoyed or refuse to show you any, you might be less likely to want to work with them.
3. Communication skills
We’ve all accidentally hired a professional who hasn’t been known for their conversation skills, right? So we all know how frustrating it can be when they don’t respond often or keep us updated on everything we need to know. One of the major services brokers offer is communication throughout the sales process to ensure you know what’s going on at all times, but brokers with poor communication skills can very rarely offer this. Making sure your broker has excellent communication skills should help you in the long run by indicating that you’ll always be kept in the loop.
Final thoughts
And there we have it – how to choose the best broker for your business. Many people we speak to agree that using a broker is an invaluable experience, but only when they choose the best fit for them. When choosing your broker, make sure to consider their past experience, professionalism, and communication skills before accepting their offer. Also, don’t be afraid to ask for references! A reputable broker, like Lloyds brokers, won’t have an issue showing off their glowing testimonials. Good luck!
