Your evaluation and comfort with your broker or advisor goes a long way to the success of your transaction. Meet with your business broker and understand his/her qualifications and capability to meet your needs.
- What is the educational background of the professional?
- Does the professional have a financial certification? Is he/she familiar with tax issues?
- Is he/she a business broker, or a real estate broker also selling businesses?
- Is he/she affiliated with key business brokerage organizations?
- What is his/her experience in key aspects of a buy/sell transaction?
- Is he/she comfortable and capable dealing with the multiple parties necessary to complete the transaction (lawyers, accountants, closing agents, etc.)?
- Has he/she ever evaluated and negotiated fine details in complex documents such as Purchase Agreements, Leases, Term Sheets, etc.?
- Is the broker the principal of the firm?
- Other than the brokerage business, has the broker run a business before and thus, can relate to your concerns?
PRICING OF YOUR BUSINESS
- Can he/she explain the pricing of the business from multiple perspectives?
- Is he/she comfortable explaining the pricing so that the buyer can understand the rationale behind the pricing?
- What steps will the broker take to ensure confidentiality of your business?
- What is the buyer qualification process?
- How does he/she evaluate whether the buyer fits into one of the ten categories of buyers and thus present you with the one that best suits your needs?
- Have he/she review the marketing plan.
- How often will you be updated on progress?
- How long does he/she think it will take to sell the business?
- If the broker charges an upfront fee, what is it used for?
- Is the upfront fee netted against the commission upon completion of the transaction?
- Does the broker charge for other costs, such as travel and advertising?
- Is he/she someone you can get along with?
- Is he/she involved in civic activities in the community? If he/she is active in looking after the interest of others he/she is likely to look after your best interests as well.