If there’s one thing that’s as true in life as it is in business, it’s this – change is never easy. And when you need to make a monumental change regarding your business, you often need some help. That’s where business brokers come in – if you’re thinking about selling your business or buying someone else’s, you’ll need their help. But as with any other business deal – knowing what you can expect from your business broker is extremely important. As is selecting the right people to value your business and handle it. Which is why we’ve prepared a couple of tips for you on this very topic!
Choose your broker carefully
When you’re trying to buy or sell a business, you’ll probably get a lot of offers from many brokerages, depending on how high-profile your business is. And that means having a lot of options to choose from, when it comes down to picking your business broker. But don’t let that plethora of choices fool you into thinking everyone is equally good at what they do. It’s crucial to know what to expect from your business broker before doing any sort of deal with them.
Know what your broker’s interests are
While this business transition lasts, it’s extremely important to keep one thing in mind – what are your broker’s interests in all of this? Because, while they try to get your business, some brokers will show up with all kinds of promises and analysis. They’ll go on about how well your new business will perform, even making profit predictions. And don’t get us wrong – some of them may very well know what they’re talking about. But in many cases, they’re simply trying to butter you up. Which is why you should consider your options before you move your business focus to something new.
This isn’t anything tragic – you just have to remember one crucial fact: your business broker cares mostly about their own commission. Again, it’s understandable; in the world of business, everyone takes care of their own interests first. And if you understand that, you’ll know what to expect from your business broker, which will allow you to act accordingly. So, no matter what they’re saying before you make a deal with them – make sure that their interests align with your own.
Find someone who gets you - and you’ll know what to expect from your business broker
Up until now, while examining what you can expect from your business broker – we’ve mostly talked about the business side of things. And sure, that’s obviously important – if someone is going to help you buy a business and start dabbling in something new, you want them to be savvy at what they do. But let’s face it – investing in a new business is a big change in your life and it’s never cheap.
Which is why you need to understand something – this isn’t a purely financial decision. If you’re going to buy a new business, you’re not just investing your money into this. No, you’re doing far more than that – you’re making a conscious decision to invest your time and effort, often not knowing the results. So, it’s not enough for your business broker to understand your finances – they also need to understand your lifestyle and your interests. This will allow them to find you a business which will fit you, not just financially – but on a deeper, emotional level. In any given business, you’re not investing money – you’re investing yourself. Which is something any good business broker understands.
Do your own due diligence
When you hire a business broker, you’re looking for a professional to help you find a new business that’s worth investing in. Understandably, one of the things you expect from your business broker is doing all of the research. The size and worth of the business you’re investing in doesn’t really matter – either way, your broker needs to do their due diligence. But that’s not all – not if you’re actually being careful.
Because while this is definitely something every broker should do – for numerous reasons, you shouldn’t just leave it to chance. If you want our advice – we recommend doing additional research on your own. Indeed, before you sign anything final – make sure to take a look at the books yourself. Or, if you’re not financially savvy – hire another expert to check them out. Sure, this may seem distrustful – but it’s the only way to be certain that there wasn’t any malpractice or honest mistakes made.
Learn about the industry standards
If you’re thinking about what you can expect from your business broker, don’t worry – you’re not the first to deal with this, not by a long shot. That’s why it’s important to learn about the industry standards in the world of brokerage. Before you hire a broker, ask around about the usual commissions – both the size and how they’re structured. Also, once you’ve set your sights on a potential broker – try to find some testimonials about their previous work. In the age of the Internet, nothing is easier than this – so make sure you don’t go into this without all of the information.