If you have decided to sell your business there are two avenues open to you – do all the hard work yourself or, buy in the services of a business broker.
However, this may be something you have not done previously and thus, knowing what questions to ask can be a great help in deciding if the business broker or business transfer agent is the right one for you.
How much experience do you have of selling a business like mine?
All businesses operate within a certain market or sector, some of which are highly specialised. There are also business brokers who specialise in certain sectors, such as the sale of clinics or other medical businesses. You need to look for a broker that has experience of selling similar businesses to yours as this means they have an insight in to how the market operates, as well as who potential buyers could be.
How big is your business?
In essence, there is nothing wrong with working with a small broker, in fact choosing one can hold many benefits such as their services including the separately managed prime brokerage account, IRA, and others. When you ask this question, you are looking to see and hear from them a commitment to selling your business, selling it for a fair price and that they will work hard on marketing your business. Big firms can be dynamic, as can small firms but it pays to measure how driven a firm is to getting a result.
How successful are you in selling businesses, especially one like mine?
On one hand, you do need to bear in mind the economy. When a recession has hit, the market will be slow and sales can be hard to come by. That said, you still need to be able to have some form of objective measure of how well and successful the business broker is selling businesses, especially ones like yours.
How will you value my business?
If the response is multiply your income by two, then you need to keep searching for a business broker. This response could mean that your business is undervalued meaning your pocket is hit hard, or overpriced, failing to attract buyers. Valuing a business is a detailed and sometimes complex process. It takes time to work out the value of a business too, and you will need to supply them with various figures and details.
How will you market by business, without making it obvious to customers and competitors that it is on the market?
For some business owners, selling their business will need to be done in a confidential manner but clearly, the possibility of marketing it can be hampered. However, it has been done in the past can be done again. Teaser information is a way of telling potential buyers a business is for sale, but maintaining its anonymity until they have expressed a serious interest in exploring the business further.
Do you have potential buyers ready?
There are some brokers who do keep an active list of potential buyers but there are also companies that will tell you they have thousands of buyers waiting in the wings. This could mean that this is an email list of thousands of people who have signed up to their newsletter. If a broker tells you they may have a few people lined up, that is better than none and is certainly better than a thousand anonymous people on a mailing list.
How many listings do you have active at the moment?
A small broker with a huge number of listings may mean they have a throw it at the wall and see what sticks approach which, in essence, is a ‘system’ that has many faults. Again, bear in mind if the economy is slow, then selling will be slow. What you are measuring however, is the capacity the business broker has to take on your sale.
Article provided by Sovereign Business Transfer – a North West based business broker and business transfer agent.