Share This Info:  

Selecting A Business Broker To Sell My Business: What Should I Look For Them To Do?

See All Discussions   •   See All Contributors   •   All New Discussions & Comments

Comments & Replies: 3     Views: 3940     Posted By: Peter Siegel MBA  Peter Siegel MBA: BizBen Founder, ProBuy/ProSell Program Director



Topics: Business Brokerage, Business Opportunities, Selling A Business     Tags: business brokers, selling a business



What should your business broker do for you to successfully sell your business? Well, there's many things that a qualified business broker can and should be doing for you. Here are a few key ones:

Keep a Secret: Your broker should be good at keeping a secret. Keeping a sale confidential is essential to your success. A business broker should ensure all safeguards are in place to protect your company. One word to your suppliers, employees, or customers that you are selling the company can have repercussions on your business operations.

Deliver an Effective Marketing Plan: Just because a business is for sale doesn't mean it's going to sell itself. Selling your business is all about the right marketing. Properly positioning the sale of your company to attract and motivate as many business buyers as possible should be your goal.

Allow You to Avoid the Pressure: Selling a business is not an easy decision and once that decision has been made the process doesn’t get any easier. A Business Broker should assist you and let you take the time to learn and clarify all uncertainties to avoid the pressure you may feel in a complex transaction.

Keep Costs Low with No Heavy Front Fee: Business broker fees typically range from 10 to 15% commission of the sale price OR a flat fee of $10-$15,000 if the business’ sale price is less than $100-$150,000. Avoid any broker asking you for a large, upfront fee to assess your business value or start an application process.


Peter is absolutely right about what a professional business broker should be doing for the seller.

In addition,

An Iron-Clad, No-Ambiguities Non-Disclosure Agreement ("NDA"); In order to assure that the confidentiality requirement has some teeth in it, make sure that the broker's NDA is clear, unambiguous, and strict.

Tips in Building the Value of the Business: A business broker with experience as a business owner and expertise in business development can assist a business owner in short-term "tweaks" that can significantly improve the actual and perceived value of the business for sale. Be sure to ask.

Services with No Upfront Fee: As Peter pointed out, there are still some business brokers who charge a "set-up fee" or "non-refundable retainer" of thousands and tens of thousands of dollars (plus an eventual "success fee" commission) to do what reputable brokers will do at no cost, for the opportunity to earn a commission if and when the business sells. Even worse are those brokers who charge a monthly "working fee" for as long as the business is on the market, plus a commission at the end.--What incentive do they have to sell the business? While this arrangement might be acceptable for investment bankers handling deals in the tens of millions of dollars, it is not appropriate for the under-$10-million small business market. Wouldn't we all like to be paid in advance with no promise or guarantee of success! But, a true professional will have enough confidence in the competence of his/her services to be paid only upon successful completion of the sale.

A Realistic and Supportable Valuation: The same "bait and switch" happens in residential and commercial real estate sales--the broker suggests a high and unrealistic listing price with no rationale behind it in order to entice the business owner into listing with that broker. I regularly provide business sellers with a sensible and realistic opinion about the range of prices the market is likely to support; but, many factors affect an offer price, including the type of buyer submitting it. Together, the seller and I decide on a price supported by a rationale--a certain return on investment (ROI), or a multiple of SDE, or a percentage of gross revenues, etc.--that is supported by comparable sales, economic viability, and common sense. Don't be fooled by the broker who tells you your $300,000 business is worth a half million dollars and, then a month into the contract will tell you to lower it to $250,000. Any seller who would like an objective and realistic assessment of the current market value of their business is more than welcome to consult with me without obligation.


Contributor: Due Diligence, Valuations Advisor

I can agree (almost) with much of what has been previously said here but would like to add a few insights from my personal experiences.

There are huge differences in the quality of products and services offered . I have previously sold an accounting practice and paid a fee of 10% of the sales price to a broker who's contribution to the process did not extend much beyond maintaining a website.

On the other hand if the business you are selling is in the middle market paying for an independent business valuation as well as a professionally produced business review can make sense. The broker is in a conflict of interest situation in the valuation process.

I have also seen confidential business review products purchased at fees in excess of $10,000 (non refundable ) that failed to correctly identify the name of the business or properly recast earnings. Ask for examples of work product.

When talking to broker get a sense of their background beyond business brokerage...If they have previously sold houses , or toasters that should give you pause. Business brokering ( at least as I see it ) has little to do with selling and much to do with analysis and positioning of the business. Education matters and quite frankly is lacking in the industry.

Find out if you are in fact dealing with the broker or a salesperson. Visit their office. It should be reasonably local to you or that in itself is problematic.


  Helpful Resources To Assist In Selling And Buying California Businesses
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.

Jordan Green, JRG Communications - Marketing Services For Brokers, Agents

JRG Communications is a marketing communications company assisting business brokers & agents. Services include: social media management, custom website creation & design, content creation services, optimizing and posting listings on business-for-sale websites, custom articles & blog post creation.

Brad Steinberg, Broker - Laundromat Specialists

Laundry specialists - founded in 1968 by three laundry professionals, PWS is a family-owned corporation. Through the years it has grown to become the largest vended laundry equipment distributor in the United States. Call Brad Steinberg at 323-721-8832 to sell or buy a coin or card laundromat.

Elizabeth McGovern: Escrow Services - SF Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.

Helen Yoo: Escrow & Bulk Sale Services - Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

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.

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
Why Isn't My Business Selling? 6 Great Questions To Ask Yourself For Answers

It can take months, sometimes longer to sell a small business. Here are 6 questions from Peter Siegel, MBA (Business Purchase Financing Expert, ProSell Program Advisor with BizBen) at 866-270-6278 to ask yourself to help you determine why your small to mid-sized California business isn't selling.

Thinking Of Selling My Business: What Factors Create Value And Drive Price?

There are a lot of misconceptions about what enhances the value of a business. The following factors in this Discussion Post on BizBen are aspects of a business that really drives its value and pricing. Business owners thinking of selling should check these out these factors before selling.

Tips When Using Escrow Bulk Sale Services When Buying Or Selling A Business

The final part of the business for sale transaction is the escrow and bulk sale process by Peter Siegel, MBA (Business Purchase Financing Expert, ProBuy & ProSell Program Advisor) answers questions and describes the escrow and bulk sale process. Peter can be reached direct at 866-270-6278.

Financing A Business Purchase With Limited Or No Real Estate Collateral

In my experience working with the "right banks and financial institutions" repayment ability sometimes overrules collateral pledged by someone needing financing for a business purchase or a down payment. Peter Siegel, MBA (Business Purchase Financing Expert) at 866-270-6278 shares his experience.

How Many Listings Is Too Many For One Broker To Handle? Is It 5? 10? 20?

Peter Siegel, MBA in this Vlog/Podcast discusses how many listings is too many for one business broker to handle at one time. Is it 5 is it 20? I recently had a coaching call with one of my BizBen broker clients who asked that question this week. There are many factors that go into the answer.

Absentee Run Small Businesses - Is That Really A Possibility For Buyers?

Is buying a absentee run small business really a possibility? Peter Siegel (BizBen ProBuy Director) gets asked this question a lot in his consulting sessions with business buyers. Read more about what other Advisors and Intermediaries feel about this topic on this popular BizBen Discussion!

Find Out Why 80% Of California Business Buyers Never Find And Buy A Business

First the dreaded statistic: 80% of all California business buyers looking to buy a small to mid-sized business in California never end up doing so! Peter Siegel, MBA BizBen Founder And Director at 866-270-6278 covers successful tactics all business buyers of small businesses should utilize.

Absentee Run Businesses - A Myth Or Reality When Buying A Small CA Business?

Some buyers search for an absentee business to own, wanting to collect profits generated by a successful enterprise without having to stand at the sales counter or cash register, without having to cook, operate equipment or talk to customers. Here's some insight about finding such a business.

See All News, Tips And Events

Business Purchase Financing SBA Loans
Tim Cunha Business Brokerage
Southern California Legal Services For Buyers And Sellers
San Diego County Wine Store For Sale By Owner
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!
The Bottomline: What Exactly Is Adjusted Net Income, SDC, And Cash Flow?...
Read More News
Tips When Using Escrow Bulk Sale Services When Buying Or Selling A Busin...
Read More News