5 Qualities of an Ethical Business Broker that You Should Look for When Selling Your Company

OlufisayoMay 10, 201901,733 views

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Your search for the right buyer for your business should be preceded by your careful selection of a professional business broker.

If you are uninitiated, business brokers are companies that are kind of like middlemen between people interested in selling their businesses and parties that are looking for businesses to buy. They are somewhat like real estate agents; the only difference is that they deal with businesses instead of houses.

A lot of business owners wonder about the need of hiring a business broker. However, selling a business is not like selling a car or a house. You cannot openly advertise your intent to sell your firm. Mainly because that may end up destabilizing your operations as employees may end up leaving their jobs. Apart from keeping it discreet, you also need to evaluate your business using a method that’s acceptable to prospective buyers. A professional business broker will not only help you with the valuation but also promote your listing in discrete channels.

To help you find the right broker for your business, we take a look at 5 qualities that you should look for in a business brokerage firm.

Ethical Business Broker

Specializes in Selling Your Type of Business

Certain business brokers are known for selling certain types of businesses. Their industry specialization attracts both buyers and sellers belonging in the same industry. Therefore, if you have an online business find a broker that has a long history of selling ecommerce websites.

Remains Transparent About Their Past Deals

The only way to judge a business broker is by going through the list of past deals they have successfully mediated. Most reputed brokers should have no problem disclosing their past deals. If they are withholding that information, you should consider that as an immediate redflag. When studying the past deals, make sure to ask for the original price quoted by the seller and the final deal price. They should be ready to provide a reasonable explanation if those two numbers are far apart.

Doesn’t Ask for an Upfront Fee

Much like any other brokerage firms, business brokers earn money after the deal is secured. They usually take 10 to 15 percent of the total deal value as their commission. Asking for upfront payment is not an industry norm and it should tell you that the firm has limited confidence about making the deal happen.

Doesn’t Pressurize You to Sign a Deal

As a business owner, you have the full right to accept or reject a deal and your business broker should respect that. That means they should never try and pressurize you into signing a deal that you are uncomfortable with.

Has More than One Channel to Promote Your Listing

Most online business brokers have a listing platform that allows buyers to review businesses and start the negotiating process. However, being totally dependant on one channel is not the best way to draw in the best prospects. Find out if the business broker promotes your listing in multiple channels. Do they make calls to clients who have shown interest in the past? This will help you find the right prospect at the quickest possible time frame.

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