5 Tips to Help You Choose the Right Business Broker: Essential Tips

Selling or buying a business is typically a unique, one-time sale process. Nonetheless, some entrepreneurs have the expertise of launching and selling multiple businesses throughout their professional journeys. Whatever your situation, identifying potential buyers is not an easy feat. And the act of closing deals is a somewhat shockingly complex process that greatly benefits from a skilled broker who’s able to provide valuable insights. Making sure you are well-prepared and fully aware of what qualities matter most when vetting potential business brokers is crucial. 

Familiarizing yourself with how to identify a broker who possesses apt negotiation skills, the ability to read market conditions, an awareness of fees involved, and shrewdness screening potential buyers or sellers will give you an edge in the market. Knowing what qualities to look for will empower you to determine a broker’s ability before confirming this important decision will make all the difference when you decide to execute your business goals.

When choosing the right business broker to trust with all aspects of your business sale in California, there are several essential tips for finding a business broker who works for you. Familiarize yourself with of the most crucial characteristics to look for:

5 Qualities to Look for in Your Business Broker

1. Shares Valuable Insights

Find a business broker who shares highly relevant awareness of both the buying and selling processes through detailed business valuations, customized marketing strategies, and a proven track record of negotiation strategies. They should have comprehensive due diligence checklists demonstrating the value of their expertise to you and your goals.

2. Practices Patience

Whether buying or selling businesses, the right business broker will apply patience as a critical quality of their method of operations for several reasons. Not only does a cool headed approach give attention to take time to assess nuances of your needs to provide tailored solutions, patience reveals a willingness to accommodate detailed explanations of steps and legalities. 

3. Asks Thoughtful Questions

Choosing a business broker who not only listens to their clients, but inquires seriously about their goals, motivations, and concerns demonstrate commitment to each client’s unique needs.

4. Utilizes Active Networking

Many great business brokers have one thing in common–they prioritize making meaningful connections and professional associations. A good broker sets up business consultations with potential buyers and maintains relationships with real estate agents to enhance their market knowledge to better serve their clients.

5. Provides & Responds Well to Feedback

The right business broker will establish a productive feedback loop where clients can comfortably express any concerns or requests. 

Do Your Research: Evaluate Potential Brokers’ Qualifications & Expertise.

Looking into the business broker’s history is an excellent starting point when choosing an agent to handle your sales process.  When selling a business, the broker should be prepared to provide references from past clients for whom they have successfully facilitated sales.

Business Broker’s Experience

Determining a business broker’s expertise is based not only on how many years the individual has been in the business, but more importantly, learning how many businesses they successfully sold. Success rate will give you a better picture of who you’re going to be trusting your assets with. A successful track record, coupled with industry specific experience, will help even a first-time seller or buyer determine the most capable candidate when vetting multiple brokers.

Business  Broker’s Qualifications

One of the top tips for choosing a business broker that you can trust with your transaction process, is to make absolutely sure you have properly vetted your broker’s credentials. Confirming relevant qualifications can be done by confirming their affiliation with the International Business Brokers Association (IBBA). IBBA membership can help determine a broker’s professionalism by ensuring the agent adheres to high ethical and professional standards.  The ethics and honesty of business brokers play a pivotal role in not only the transparency of the acquisition process, but also the secure financial health and confidentiality necessary in the success of the closing process.

Ensure They Prioritize Your Needs: Questions to Determine an Experienced Broker Who Actually Listens:

What should you be asking to find a business broker who really hears you? 

• What process do they use to identify potential buyers?
• Does that process align with your unique goals? 
• Does your business broker ask you thoughtful follow-up questions to your stated goals and concerns. Choosing a business broker with active communication skills is key to feeling understood and heard.
• What happens if you find a broker who doesn’t take your goals or feedback seriously? Not all business brokers are good listeners. If the business brokerage is not observant and engaged, they may charge you for a generic marketing strategy that has no relevance to attracting potential buyers to your specific portfolio.

Whether you’re buying or selling, all successful transactions rely on extensive market research, impeccable communication skills, and trust between all parties involved.

Are You a Priority to Your Business Broker?

A good business broker will consistently make you their highest priority.  A broker’s commitment ensures they prioritize each transaction, apply their skills effectively, and navigate complexities diligently, leading to a smoother process and a higher likelihood of a successful business sale. Their focused dedication allows them to address potential issues promptly, tailor strategies, and maintain high standards throughout the successful business transaction.

Questions to Keep in Mind | What to Ask When Finding Truly Skilled & Most Efficient Business Brokers:

• Is this agent consistently available and invested in you? Out of all the business brokers you could hire, a reliable agent will stand out if they have a proven performance history of dedicating the necessary time to deeply understand previous clients’ specific situations and objectives.
• What is the depth of their industry knowledge? A broker fluent in current market dynamics will employ targeted marketing techniques to reach a broad audience. Complex transactions for both buyers and sellers will feel manageable with the right broker.
• What are this business broker’s credentials? Assessing past performance based on performance history with previous clients will help you verify competence and reliability of a good business broker.
• What is this business broker’s communication style? Good communication skills are imperative to the negotiation process. If you can tell a broker is responsive, confident, and transparent through their past clients and your personal interactions, you are in good hands.
• How does the broker’s commitment to their clients’ successful sale directly translate to a successful transaction? Business brokers can tout their expertise all they want, but if they are overwhelmed with too many clients or lack dedication, they may not provide the necessary attention to each sale.

Look for a Low-Pressure Business Broker: Why Should You Opt for a Broker with a Relaxed Sales Approach?

A patient, reputable business broker creates space for client education and the emotional support necessary to cultivate confidence in achieving client’s goals. 

Buyer Prep:

In addition to valuable insights, the ability to accurately interpret market trends, and a proven history of pairing buyers with suitable businesses, your business broker should employ a relaxed sales approach. Leveraging the expertise of skilled business brokers places buyers in the best position to secure maximum value for their acquisitions. Take advantage of these professional services to guarantee you receive the highest possible return for your business dealings. Overtly aggressive or hasty purchasing tactics can result in several issues for prospective buyers. 

Consequences of haste include:

• Overpaying for a business, resulting in substantial loss of secure financing and great monetary losses.
• Insufficient due diligence that can lead to buyers inheriting hidden liabilities and potential unnecessary, legal problems.
• Buyer’s remorse is the result of clients whose business brokers pressure people to make quick, careless decisions. Avoid this regret and potential legal disputes with inexperienced business brokers who feel comfortable misleading their clients for a quick buck.

Streamlined Process for Sellers: Trust in Expert Business Brokers

Just like the owner’s preparation, the selling process requires attention to detail. A broker’s industry experience allows them to comprehend the intricacies of these transactions and recognizes that each situation is distinct. Make sure you find an agent determined to refrain from employing aggressive strategies to coerce you, the owner, into actions you are uncomfortable with. Consequences for high-pressure tactics include:

• Inadequate financial records can deter prospective buyers and will inevitably complicate due diligence.
• Lack of confidentiality can lead to competitors gaining access to sensitive info they can exploit leading to diminished revenue and weakened business position. 
• Leaked information has the potential to derail ongoing negotiations, given the potentially right buyers might lose interest or change their terms unfavorably.

Who Can Market Your Business for the Maximum Value? Ensure They Have a Robust Marketing Strategy.

By leveraging robust marketing strategies, a business broker can effectively showcase a  business’s true value and attract the right buyer. Business brokers typically charge for the initial assessment and valuation, marketing creation and execution, due diligence, negotiation, and legal documentation. With all of these services and associated costs in mind, you should be seeking the maximum return on your investment. 

Reach Out to a Business Broker: What Are the Benefits of Speaking Directly with an Advisor?

• Personalized Advice: Advisor can create tailored plan that aligns with your risk tolerance, financial objectives, and time horizon 
• Immediate Clarification: If you’re uncertain about the intricate details of a given business transaction, direct communication with a dedicated business broker allows for immediate answers to your concerns.
• Accountability & Follow-Up: Speaking directly with your business broker helps ensure you set achievable milestones as well as to stay on track and motivated with regular check-ins.

Allow Yourself Time to Reflect Before You Commit:

Selling a business is more personal and complex than most other types of business transactions. Buyers and sellers, out of all the tips for finding a skilled business broker, finding someone willing to demonstrate open communication skills and understand if you take a beat to reflect on who you feel will most effectively facilitate transactions, is ultimately going to be the right broker for you. 

Subscribe for Early Alerts on New Listings:

Maintaining an open line of communication with your chosen business brokerage is important for several reasons. Once you’ve found the right business broker for you, they will make certain you gain access to new opportunities before your potential competitors to give yourself a tactical advantage. 

Keeping up on the pulse of industry trends with your personal business broker will not only give you a competitive advantage when buying or selling, this active attention to the market will also permit you to choose from a wider range of options. Knowing you will be notified first gives you the opportunity to consider and act on listings that most perfectly match your criteria before the general public. 

Ready to get started? Murphy Business Sales is a top California business brokerage and is an invaluable resource for all your buying process goals.