Selling your business? Know how to approach a genuine business broker

If you're planning to sell your business, it's probably time that you hire a business broker. A business broker when hired by the seller is also known as seller’s agent. His job is to ensure that the deal is closed only in the best interests of the seller. He also speeds up the process of selling a business by evaluating the genuineness of a buyer. This means that a business broker is responsible for shortlisting potential buyers among a number of those who approach the business for sale. There are certain things that also need to be considered while confirming the genuineness of the buyer. With that in mind, here’s a list of five things that could make the task of approaching a genuine broker easier for you. 

• Get a brief of the services to be provided:

Acquiring knowledge about your business broker is your first step towards ensuring his genuineness. Make sure you approach a business broker via a reputed and trusted firm or through a trustworthy acquaintance. This person could be someone who has previously bought or sold a business under the business broker's guidance or someone who is a close relation. This way you can be sure about the services that your business broker has provided earlier in his career and decide if this individual should be hired or not.

• Ask his qualifications and past experience:

Ask for the qualifications of the business broker and make sure that the individual is qualified and experienced enough to take up the job. Suppose, you have a business for sale in Miami. If this is the case, you should make sure your business broker is well acquainted with the market conditions of Miami. His experiences should definitely include deals that have been undertaken in Miami. The possibility of meeting a person who claims to be a business broker without any qualifications is very high. And it is highly unlikely that this person will be able to close your deal without a problem. 

Make sure you do not get tricked by such frauds. When you realize that the business broker you have approached is not qualified enough, this is the time that you should back out and look for business brokers in other places or firms. 

• Cross check data:

There is a possibility that the supposed business broker that you have encountered has a way with words and you have almost been convinced by him. Yet, you should always make sure to cross-check the data provided by the broker to avoid any further hassle in the later days of the process of selling your business. If, for example, you have a business in Miami, make sure that you cross check the data given by the broker from your contacts around the location. 

• Confidentiality agreement:

Do not forget to sign the confidentiality agreement with your business broker before you start giving him the inside details of your company. Discuss with your broker all the points of the agreement in the initial meetings. A genuine broker should not have an issue with the confidentiality agreement. However, a fraud or fake broker might make excuses and try to avoid this clause.

Make sure that any essential information about the structuring or functioning of your business is given out only after the confidentiality agreement is signed. If your business broker tries to convince you otherwise, this is a major red flag. If that happens, you should stop any further dealings with this individual.

• Ask the brokerage fee upfront:

A business broker is obviously not going to help you sell your business without charging you a fee. However, keep in your mind to ask him about the remuneration upfront in the first meeting. This factor plays a vital role in deciding if he is a suitable broker for your company. There might be situations where the fee asked for is excessively high and unaffordable. This might be a signal for upcoming danger. 

Verify and take second opinions on the brokerage fees in the surroundings of your business location. Also, ask your business broker about any hidden charges that he might end up charging at the end of the deal, which will only create confusion and chaos. Make sure that a contract is signed regarding the same to avoid tension afterward.

Hiring a genuine business broker is very important in the process of selling a business. Any mistake while selecting a business broker could cost you a lot of money, time and could delay the process altogether. Thus, you need to be extra attentive to these criteria so as to ensure that the business broker is genuine and will do a great job of helping you to sell your business.