When you are selling your company, it is important that you have a broker on your side to lend a hand in the process of marketing your company and closing the sale. There are many different things you need to consider before you hire a broker to represent your company. By doing your homework, you can make sure that the broker you hire is highly qualified and will do the job well.
Not only to you want to verify their qualifications, their web presence, but you want to review their recent track record.
- Look at their website and make sure it is easy to use. You want to investigate what manner of advertising they will use to present your company.
- You want to find out what recent clients have to say regarding the performance of the broker. You should be able to ask for and receive a list of names for owners who have, within the last six months, sold their company using this broker. By having this information you can ask these references what their experience was like and if they would recommend using the services of this broker again. Steer clear of a broker who refuses to give you a list of their testimonials or references. This is generally a bad sign.
- Verify the prices for their services. On average, a broker will charge a success fee. This is a commission that, much the same as a real estate agent, is a portion of the total selling price at the closing of the sale. The commission is often ten percent of the sale total. Ask the broker about any other possible fees too.
- Ask the broker how they price a business. You want information about how they are going to price your company for sale and you can check this web link to find out how they charge. See what method they use to establish an asking price for companies similar in size to yours. See what percentage of variance they advise for you between their asking price and the closing price. See what average percent of the asking price has been successfully closed over the past year with listings through this company. If there is a small percentage of variance and over the course of the past year they have typically received close to the asking price, you are likely in good hands.
- Ask if the broker has ever been sued. You want to know about their reliability and their reputation before you use their services. Ask if a listing client or any business buyer has ever sued them if they have been sued, find out why and when it was. Check to see if the broker has professional liability insurance. This is a form of insurance which protects business should the provider somehow be negligent and the client, as a result, suffers some form of financial harm. There is really just one answer to this last question. And that answer is “yes”. If they do not carry any professional liability insurance then you most definitely want to turn to another broker before you sell your company.
All in all, as the seller, you can find someone who is highly qualified by simply doing a bit of homework. With a great broker on your side, you can sell your business quickly and for a good price.