Selling your business is one of the most important transactions you’ll ever make in your career. And buying a business is similarly complicated and potentially confusing. It’s no wonder then that you’ll hear time and time again that the best way to navigate the sale or purchase of business is by enlisting the assistance of a qualified, experienced business broker. At CGK Business Sales we see the value we provide time and time again, so of course we agree! But once you make the decision to work with a business broker, how do you know who to choose? Here are the first four questions to ask a business broker.
1. What experience do you have with selling and/or purchasing businesses?
This is the most important question you can ask. Let the broker tell you about their general experience, and about their experience in your industry as well. Don’t get too caught up in industry experience, however. It’s valuable, but it can be overrated as well. Pay more attention to the broker’s success rate at selling a variety of businesses. You’re looking for someone who does this time and time again, not a sort of general sales person trying to branch out into business sales.
2. How much of your income comes from commissions, and how much from fees?
You want an incentivized broker. If their pricing includes large upfront fees, they may be tacitly acknowledging they aren’t all that good at getting deals done. A broker on a commission is highly motivated to get you the best possible price and get the deal done. That’s what you want. CGK Business Sales never requires upfront fees or monthly retainer fees. We believe that your success is our success. We are only paid when the business sells.
3. How do you value businesses?
The first step of any sale or purchase is the business valuation. Talk to the broker about how they arrive at a valuation. There are multiple ways to approach price, and you’ll want to find someone who really knows what they are talking about.
4. Is everything we discuss confidential?
Confidentiality is of paramount importance during any business sale. You don’t want either your employees or the competition finding out. Employees can get nervous about the future, and competitors can try to get the upper hand on you. A good broker will be completely confidential with you, even in the early stages of simply discussing the possibility of a sale. Additionally, once you hire them, a good broker will get a signed non-disclosure agreement (NDA) from any potential buyer.
Talk to CGK Business Sales in Austin, TX or any of our business broker offices nationwide and you’ll find we’re prepared to answer any of these questions – and many more! We believe we’re the right brokers to help you with your business sale. Contact us today (completely confidentially of course!) and start the conversation.