Business Brokers - Sell Business - Business Sales and Acquisitions - SunbeltNE

If you are thinking of selling a business, you may be looking for a business broker who can help match you with an appropriate buyer. However, there are too many business for sale owners who have had their fingers burnt with wrong business brokers. We hence thought of listing down some red flags you should watch out for while looking for a business broker. Some of the red flags you should be aware of are as follows:

• Huge Upfront Fees

Some business for sale owners have the bitter experience of paying upfront fees to business brokers and then regretting when, after months of being listed, their business still doesn't have any valid offers. Upfront fees may be a reasonable bet when one is dealing with the world's leading business brokerage firm. However, business brokers catering to the small business category normally charge per month or set up an agreement of commission on a successful deal. When selling a business, if a business broker asks for upfront fees just start looking at other business brokers.



• Inability to Provide References

Another red flag about a business broker is his/her inability to provide a reference of past clients. References from past clients give you an idea of the methodology adapted by the broker in selling a business and the focus of the business broker in question. That too, from a seller's perspective. Feedback from past clients is an invaluable piece of information on basis of which you should decide whether to go for that business broker or not. If the business broker is unable to provide any such reference, forget him/her.



• No Reports or Updates

You need to know exactly what activity is being undertaken to sell your business. You need a business broker who actively calls prospective buyers and not someone who just posts on business for sale websites or sends out mass mailers. Ask for regular updates on who is being contacted in the form of bi-weekly reports or personal meetings so that you are in the loop. An unscrupulous business broker may waste your time unnecessarily if you are careless in your dealings with him/her. Unless and until you are aware of what is happening, selling a business is not going to happen.



• Inability to Prove Industry Experience

One must-ask question to a business broker should be: have you sold any businesses in my industry? A business for sale process closes faster if the business broker has experience in selling similar businesses. He/she will have a database of buyers if they have dealt with a similar business in the past. They will also know how to approach a buyer and have an inkling of the negotiation process. However, not a lot of brokers specialize in a particular industry. So if the broker has a lot of experience in selling a business, you might have to let go of the 'industry-experience' factor.

A business broker is the most important person you hire for your business for sale process. The value you get after selling a business is totally dependent on the business broker you hire. Keep the above-mentioned red flags in mind so that you hire the right broker for selling your business.