Share This Info:  

7 Ways To Get the Most From Your Business Broker


Working With Business Brokers

Chances of success in business sales multiply dramatically when owners and brokers work actively together through the entire process. I find that many automotive owners (and sellers in general) feel so engulfed in running their shops that they do very little to help the broker along the way. They presume their broker "does all that sales stuff."

Many owners tell themselves, hey, if I'm paying this guy a hefty commission, he better work for it. Which is true. Still, there is no commission if there is no sale. And we brokers are well aware of the prevailing statistics - more than 70% of business listings don't sell. That creates a pecking order, a priority system in the broker’s mind. You may not know it but it's possible the broker has you pegged as a business with a very low probability to sell and isn't spending any time on your listing.

Here are 7 ways sellers can get the most out of their brokers and increase their chances of crossing the finish line.

Verify the Marketing: Sadly, the vast majority of brokers do very little to actively and actually market your business for sale. In our internet universe, it's become almost standard practice for many brokers to post their business listings on a small handful of websites, then sit back and hope for the best. It’s important to understand what marketing methods are actually being employed. Ask if he does email blasts. Direct mail. Phone prospecting. In-person canvassing. Has he asked you which employees, competitors or neighbors may be important to call as potential buyers? And does he know who NOT to call to protect your confidentiality?

Consistent Contact: A broker will work harder when someone is watching. Most of us will hate to admit it but it's a simple reality. Owners will get better service, greater sales exposure, and ultimately better results, when they remain actively involved in the marketing and sales process. You should not go more than two weeks without speaking with your broker, even if it's simply to get a marketing update.

Information Check: Before hiring a broker to represent you and your business, ask detailed questions about how they market your business, how they find buyers, and how they will present the information. Make sure you review and approve the flyers, executive summaries and marketing pieces that go out. Don't presume the broker is getting it right. They often don't.

Anonymous Checkups: There's nothing wrong in a business owner checking up on his or her broker from time to time. Have a friend or colleague anonymously inquire about your business. See if your broker is returning calls promptly, giving accurate information, pointing up the benefits and advantages of your business. Determine if your broker is properly "selling it." Let the broker know what you found.

Staging Your Business: Realtors spend quite a bit of time and effort "staging" a home before putting it on the market. They have sellers not only clean and unclutter the home but sometimes repaint, re-carpet or re-landscape. Business owners should do the same. Whether you’re selling an auto repair shop, restaurant, manufacturing facility, pretty much all businesses can look better and project a more positive image with minor cosmetic improvements. It may seem insignificant but it signals to potential buyers that the business is being cared for and gives them more confidence.

Pay Upfront Fee: I know many of my broker colleagues vehemently disagree with the idea of charging a retainer or any type of upfront fee to business owners. The practice is more common in larger M&A transactions and on the East Coast. The prevailing attitude here in California is that Main Street retailers and small business owners will be turned off by an upfront fee and view the broker as a crook or an opportunist. Brokers often resist the upfront fee because it discourages listings and puts pressure on them to perform. As long as it’s not a huge amount, owners will get better results when they and their broker are invested fully. Paying a small fee spurs action and creates cooperation in a way that is more than worth it.

Price It Properly: Do yourself and your broker a huge favor. Price your business appropriately. Have reasonable expectations. Don't expect the broker to achieve an unbelievable price. One thing sellers often don't consider - when they demand an inflated price and demonstrate they're not willing to come off it, the broker won’t have much enthusiasm for working on your deal. You're not likely to get great service.

It mostly comes down to consistent, honest communication between owners and brokers. When you invest the time, it's much more likely to end in a pleasing sales experience.

Brian Loring, CBBAbout The Author: Brian Loring has been a broker since 2005, closing more than $150 Million in business and commercial transactions. He focuses on the automotive sector, providing unparalleled service to owners of repair, body, smog, tire, brake and lube shops in the LA and Ventura County areas. Brian can be reached direct at 818-973-2755.


Categories: Business Broker Information, How To Sell A Business, Selling A Business


Comments Regarding This Blog Post


Brian, you make some really good points. One of the most easiest ways to get the most out of a broker is for a buyer to communicate that they trust the broker and visa versa. If the relationship is contentious then it makes selling the business that much harder. I understand that there are shady brokers out there, and I don't blame buyers for being cautious, but once they have found a broker that they trust, then by all means, let them do there job. One of the most important things that shows trust is an appropriate amount of time for a listing. If a buyer gives a broker 4-6 months on the listing contract, instead of 60-90 days, then the broker is much more likely to spend time selling it, because they are not afraid of wasting their efforts. Another way to help your broker is a decent amount of money in commission, this is not just to cover costs/marketing/time, but also it allows the broker to have enough money in the till to offer money to other brokers to get it sold.


Brian addresses some really important points about the selling/listing brokers activities. One issue is the question of an Upfront Fee. This is currently not the norm in California, but I know of brokers in other states who are experimenting with an upfront fee to "buy down" the commission. For example, if the broker and seller reach an understanding about the likely selling price (not necessarily the same as the listing price), the seller may pay 1% of that amount up front in exchange for a 2% reduction in the commission on sale, or 2% for a 4% reduction, etc. In other words, let's say the business is to be listed at $400,000, but the broker and seller expect it to sell for $350,000 and the commission is 12%, the seller could pay an upfront non-refundable "set up" or "retainer" of 2% ($7,000) in return for reducing the commission to 8% if and when it sells. Now the broker knows he has a truly committed seller and will be even more inclined to put in the extra effort to make the sale. And, the sale benefits from a lower cost upon the eventual sale.


  Helpful Resources To Assist In Selling And Buying California Businesses
Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.

Diane Boudreau-Tschetter: Escrow And Bulk Sale Services

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses

Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.

Hasan Abdullah, Esq. E-2, Immigration Legal Assistance

I have over 10 years experience with E-2's and immigration issues. E-2's approved for as little as $10,000. Let me assist you with E-2 visa strategies when buying and selling a small to mid-sized California business. Mention BizBen.com for a FREE consultation when phoning me direct at 510-500-1155.

Ralph Santos, Business Broker Specialist - Health Care Related Businesses

Using my MBA and my perseverance I will make things happen! I provide business brokerage niche services specializing in the hospice and home health care agency industry in the Los Angeles County or Ventura County areas. For either buying or selling assistance please phone or email me today.

Chuck Post: Laundry Buyer Representation, Consulting, Due Diligence

Chuck Post has 32 years experience in the laundry industry, specializing in assisting laundry buyers (and entrepreneurs) with buying or starting up, building, re-tooling, laundries throughout California. Laundry buyer representation, consulting, due-diligence, lease negotiations, laundry valuations.

Mike Brewer: Liquor License Brokers, ABC Consulting Services

Liquor license brokerage and consulting services. We provide: Alcohol License Transfers Application Consulting & Processing, Liquor License Purchases & Sales, City Zoning Permits & Land Use Entitlements, Public Convenience or Necessity Findings and Letters. Phone Mike Brewer direct at 800-437-1100.

Janet Carrera - Escrow & Bulk Sale Services - SF Bay Area

Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Getting An SBA Loan To Buy A Small Business: Dispelling Some Major Myths

When seeking SBA loan financing many potential business buyers have wrong information about the process of securing the best financing to buy a business. Peter Siegel, MBA (at 866-270-6278) a business purchase financing expert delves into the myths and facts regarding SBA loan financing.

Differences Between Business Appraisers, CPA's, And Due Diligence Experts

What are the differences between a Business Appraiser, CPA auditor and Due Diligence Expert - and why should you care? Insights from Willard Michlin, CPA in his latest BizBen blog post that will be useful for someone engaged in, or planning to conduct due diligence in the future

Due Diligence Issues: What Business Buyers Should Know About The Process

Willard Michlin, CPA, CFE at 800-864-0420 elaborates why you can do a large portion of the due diligence yourself, depending on your background, but you should never try to do it solely on your own. In this BizBen blog post he explores ways business business buyers get themselves into trouble.

Live Podcast: How Not To Get Sued When Selling Or Buying A Business - 12/12

On Wednesday Dec 12th at 4PM, Mark Chatow, Esq. discusses how not to get sued and protect yourself when selling or buying a business. All business buyers, business owner/sellers, business brokers and agents should listen to this LIVE Podcast. Stay out of legal troubles by listening to this Pocast!

Podcast: E-2 Visas: Buying & Selling CA Businesses: Attorney Explains All

Hasan Abdullah, Esq. is a Specialist In E-2 Visas and Immigration Assistance For Buyers & Sellers in California. During this Podcast he answer questions on various issues regarding E-2's - all buyers, sellers, brokers, & advisors should listen to this BizBen Podcast on this important topic!

Due Diligence Checklist: 10 Key Items To Investigate When Buying Businesses

Buying a California small business involves reviewing due diligence checklists so buyers can learn enough to determine whether to proceed with a deal. Here's a due diligence checklist. Peter Siegel, MBA (BizBen ProBuy Advisor & Business Purchase Financing Expert) at 866-270-6278 shares his views.

Attorney Specialist Shares Escrow Instruction Tips When Buying A Business

Once you have successfully negotiated the Asset Purchase Agreement ("APA") for your acquisition it's natural to relax a little and let your guard down. Attorney Specialist Mark Chatow discusses what business buyers should look out for when opening escrow and getting escrow instruction in place.

Business Purchase Financing Help - Expert Tips For Faster SBA Loan Approvals

Business purchase financing advisor Peter Siegel, MBA shares his views on SBA loan financing. He explains the nuances of the SBA loan process when considering business purchase financing or getting pre-qualified. Reach Peter Siegel, MBA direct at 866-270-6278 regarding SBA & Non SBA Loan Financing.

See All News, Tips And Events


BizBen Podcasts Live
Southern California Legal Services For Buyers And Sellers
Willard Michlin Due Diligence Services
Prabhjot Randhawa Business Broker SF Bay Area
Facebook
Twitter
Linkedin
Google Plus You Tube
Vlogs and Podcasts


Auto Related
Business Services
Children Related
Communication Related
Computer, Internet Related
Construction Related
Entertainment Related
Financial Services
Health, Beauty Related
Home Improvement Related
Maintenance Related
Manufacturing Related
Media, Publishing Related
Pet Related
Photography/Video Related
Real Estate Services
Restaurant, Food Related
Retail Related
Service Related
Sports Related
Transportation Related
Travel Related
Wholesale Related

Auto Body Shops
Auto Repair Shops
Bakeries
Bars, Sports Bars
Cafe Restaurants
Car Washes
Cleaning Services
Clothing, Apparel Stores
Coffee Shops
Convenience Stores
Deli Restaurants
Discount, Dollar Stores
Dry Cleaners
eCommerce Websites
Fast Food Restaurants
Florists, Flower Shops
Full Service Restaurants
Gas Stations
Gift Shops
Gyms, Fitness Facilities
Home Health Agencies
Hotels/Motels
Ice Cream Shops
Juice, Smoothie Shops
Laundromats
Liquor Stores
Markets, Marts
Nightclubs
Pizza Restaurants
Postal, Shipping Stores
Preschools, Day Care
Print Shops
Salons, Beauty Shops
Sandwich Shops
Smog Test Only Shops
Smoke Shops
Spas, Med Spas
Sushi Restaurants
Tire Shops
Towing Services
Vending Routes
Wireless, Cellular Shops
Yogurt Shops

Alameda
Alpine
Amador
Butte
Calaveras
Colusa
Contra Costa
Del Norte
El Dorado
Fresno
Glenn
Humboldt
Imperial
Inyo
Kern
Kings
Lake
Lassen
Los Angeles
Madera
Marin
Mariposa
Mendocino
Merced
Modoc
Mono
Monterey
Napa
Nevada
Orange
Placer
Plumas
Riverside
Sacramento
San Benito
San Bernardino
San Diego
San Francisco
San Joaquin
San Luis Obis
San Mateo
Santa Barbara
Santa Clara
Santa Cruz
Shasta
Sierra
Siskiyou
Solano
Sonoma
Stanislaus
Sutter
Tehama
Trinity
Tulare
Tuolumne
Ventura
Yolo
Yuba

0 to $99,999
$100,000 to $249,999
$250,000 to $499,999
$500,000 to $999,999
$1 million to $2 million
over $2 million



BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2018, All Rights Reserved

               Vlogs and Podcasts  
Join Us On Social Media - Content Updated Daily
Sign Up Today - For Our FREE BizBen Weekly Email Newsletter
Includes The Best Info On Buying, Selling, Valuing, Financing California Businesses:
Articles, Blog Posts, Podcasts, Videos/Vlogs, Discussions, Q&A, Workshops, Webinars,
Resources. Watch For An Email Confirmation After Signing Up Above. Thank you.
Clost Login


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 
Search BizBen.com

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Who Really Represents The Business Buyer In A Deal? Does Dual Agency Wor...
Read More News
Business Purchase Financing Expert Gives Tips On Proving Cash Flow
Read More News