It is almost guaranteed that the majority of humans over the years have heard stories from business owners about their experiences with some of the “fly by night” business brokers out there. These stories often cause many to wonder, “How did you get hooked up with these people? Why did you hire them?”
The truth is that there are good credible brokerage services out there. The problem is there are a lot of bad, unqualified brokers out there as well. So … how can you, as a business owner, tell the difference?
Well, after prolonged thought, below we have set forth what we think are the most important factors that separate the great business brokers from the bad.
Ethics. The horror stories we all hear are probably most often a result of a lack of ethics by the broker. Unfortunately, there is no easy way to test a broker’s ethics. Our recommendation is to make sure they achieved their CBI (Certified Business Intermediary) designation from the IBBA (International Business Brokers Association). All CBI’s agree to adhere to the IBBA’s Standards of Professional Conduct and the Code of Ethics. Next recommendation is to thoroughly check references. Chances are they probably work with, know of, or went to school with another professional that is involved in brokerage transactions. If you put some time into checking credentials, sooner or later you will find your answers.
2. Candor & Honesty. This can be difficult to judge for the untrained eye. But, what does your gut tell you? Are you receiving vague answers to your questions? Or, is the business broker you are interviewing willing to sit down with you and answer every question that you have to the best of their ability, sometimes going above and beyond? If this is the case, usually it is because they have nothing to hide, and you will not have to tiptoe around your questions.
3. Pricing Ability. Being open, honest and ethical is only part of the game. It is equally as important that the business broker be educated on matters of business valuation. One of the most important factors in selling a business is pricing it right. A mispriced business will either never sell (if overpriced) or fly off the market (if underpriced). Both situations are bad news for you as the business seller.
Make sure you ask the business broker you are interviewing if they know how to price a business. Moreover, make them prove it. Ask them for samples of several of their broker pricing analyses. Take them home. Review them, see if you would buy the business they present to you. Show it to your accountant and your attorney. Get their thoughts.
4. Education / Experience. Business brokers are professional service providers. Make sure the person or company you hire to sell and/or buy your business continually invests in their own education and professional development. Would you hire an attorney that does not keep up with current laws? Would you hire an accountant that isn’t updated on the tax code? Your business is the largest and most valuable asset that you own. Make sure the person you hire to turn it into cash is someone that stays current on industry trends, government regulations, new pricing methodologies, marketing strategies, etc.
For experienced, reliable and devoted expert business brokerage services throughout the United States, turn to Bottom Line Management, Inc, found online at https://www.botline.com and by phone at 470-990-0160. For over 30 years the Bottom Line Management business brokers have supplied their expert business brokerage skills to assist people throughout the USA to sell or buy their businesses.
Make your 2022 business purchase or sale easy — contact Bottom Line Management, Inc. today at https://www.botline.com or 470-990-0160. Don’t take the sale or purchase of your business lightly. Make sure to contact Bottom Line Management today!