5 Factors to Consider When Choosing the Broker to Sell Your Business
When getting ready to sell a business, one of the first issues an owner must consider is the hiring of a business broker. Brokers can be especially helpful in the sale of a retail business because they handle a wide variety of tasks, including business evaluation, advertising or marketing the business, prospect interviews, negotiation, due diligence interactions, and other critical aspects of a sale.
Some retailers choose to sell on their own, but more often than not, successful business sales are accomplished with the assistance of a qualified intermediary. With the difference between a successful business exit and a total disaster hanging in the balance, here are five key issues I recommend retail store owners consider when selecting a business broker:
1. Qualifications. Look for members of the International Business Broker Association (IBBA), a state brokerage association or other type of trade organization. Some brokers are also designated as a certified business intermediary. These brokers have been through extensive training on the crucial details of business-for-sale transactions that can benefit you and your business.
2. Track record. Although a successful overall track record is important, it won't mean much unless your broker also has experience selling a store like yours. The retail industry has its own unique traits and characteristics. Unless your broker understands the nuances of the industry, it's unlikely they'll be able to accurately represent your interests to buyers. Find out how many businesses like yours the broker has sold in the last 12 months to 24 months. Then compare that number across a variety of brokers you're considering.
3. Strategy. A good broker can make the process of preparing and marketing your store-for-sale a lot easier. Ideally, your broker should walk you through a systematic preparation process that removes potential hurdles and maximizes business value, even if it means delaying the listing for a few months. Once the value is set, your broker's marketing strategy should begin with a compilation of materials that will be distributed to serious prospects, and should continue with creative, aggressive marketing ideas that specifically target individuals who have the ability to purchase the business.