While you can always sell your business on your own, the fact of the matter is that, unless if you have the time, the contacts and the expertise, it would be difficult to sell at the price that is satisfactory to you. This is especially true if you don’t know of any professional buyers who are into buying businesses that are the same as yours.
So, if you are wondering if you should use a business broker like Hallmark Business Sales to sell your business, the answer is a quick resounding and all-caps YES. As you search for it online, you will see that there are many business brokers out there. Before hiring anyone, though, there are a few questions you need to ask.
How long have you been in the business? A broker that has been around for at least five years tells you that it is good at what it does and, more importantly, that it is a legitimate business that won’t leave you in the cold.
2. What kind of business do you specialize in brokering? Equally important to the lengths of the experience is the quality of the experience. Different businesses have different dynamics in the way they are sold. For example, selling a website is different than selling a restaurant.
Even when a broker specializes in the kind of business you are in, make sure they specialize or have specific experience in selling a business that is similar to yours. For example, if you own a fine dining restaurant that can seat 150 people, make sure the broker has sold businesses with the same specs because it would mean they already have buyers that would be interested in your business.
3. How many brokers do you have and how many listings are they working one? Definitely, you will want to work with a broker that has enough time on his hands to sell your business. Having three to seven businesses to work on is a fairly reasonable number.
4. What process do you have to ensure confidentiality? Trust us on this one. The last thing you want to happen is for your customers to get wind of news that you are selling your business. They might think you are in trouble even though you only want to move on to other things.
5. How do you determine the selling price of a client’s business? If a broker gives you a cookie-cutter formula for determining the selling price, run in the opposite direction. Valuing a business is actually complex and although there is a basic formula, intangibles are also taken into consideration.
6. How many buyers do you have on your list? When it comes to the number of buyers in their network, it’s quality over quantity. In our experience, the brokers that say they have hundreds of buyers are only referring to the number of people in their contact list, which means that process of selling your business will be less proactive than it should be. It’s much better to hire a broker who has cultivated relationships with a handful of buyers over the years.
When it comes to hiring a broker, you will want to set up a consultation meeting/interview with at least three brokers and ask them the questions we outlined above. Hire the broker that gives the most satisfying answer overall.
Where can you find business brokers? You will find plenty online and they are in different locations across the world. Any broker is fine as long as you pre-qualify them based on the questions above AND your business is an online business. However, if you have a local business like a restaurant, it would be much better to hire a business broker in your local area, for obvious reasons, not the least of which is that you can meet with prospective buyers and ensure that there’s continuity of your brand if that is a major concern.
Before meeting with any broker, make sure that they have a good reputation. Hopefully, they were referred by your business contacts. But if you just found them online, make sure they have a good reputation among sellers and buyers alike.