Mitch Biggs is a Featured Business & Finance Contributor with Associated Content. This is a reprint of a published article.
The business owner should get the sense that the broker is interviewing them as much as the owner is selecting the right broker. Be leery of business brokers that promise the world or do not appear to be selective regarding listings they agree to market. The business owner wants a broker that will give the appropriate amount of time and energy to their business, not the 20 other listings that are collecting dust and stagnant in a competitive market.
Although it can be difficult to get references in the business broker industry due to the emphasis on confidentiality, it is certainly appropriate to ask questions about the business broker’s track record. Here is a list of some practical questions to ask a business broker:
1. How long have you been a business broker?
2. How many active listings do you currently have listed?
3. What is the price range of your current listings?
4. How do you get paid?
5. How will you market my business and what success have you had with each method?
The business broker is looking for a motivated seller that owns a profitable business in a hot selling industry. The business owner is looking for a confident business broker that has a track record of success and will give an appropriate priority to locate a qualified buyer.
More emphasis should be placed on the business broker’s past success and network of qualified buyers rather than specific experience in a particular industry. Statistics provided by the Business Broker Network (BBN) suggest that 7 out of 10 qualified buyers purchase a business in a completely different industry than the original inquiry. Business brokers must be experts at marketing and selling businesses across myriad industries rather than be experts in a specific industry. While there are exceptions, always chose the consummate professional business broker with limited industry experience with your specific business over the industry expert with limited salesmanship and mediocre buyer network.