Choosing a business Broker
There are over 1000 business brokers or agents currently working within Australia selling businesses or franchises.
Deciding which business broker is the best option for you & your business is the top question on most business owner’s minds. It can make a big difference in how the sale progresses, whether you find the right buyer, obtain a fair sale price and ultimately SELL YOU BUSINESS.
You only sell your business once so best to get it done right!!!
Why you need to compare business brokers
Not all brokers are created equal. Well in saying that, not all have the same experience & skills. Business brokers tend to have had previous careers before undertaking the necessary training to become a licensed business broker. It is very rare to find a broker without previous experience in one of the following:
- Business ownership
- Financial Planning
- Sales or marketing
The benefit of this history?
They understand business and numbers. As a business owners, we know our business is different, it has competitors and similar businesses, but no other business has all our systems, Team IP, lease agreements, products, services, work enviroment etc. No two businesses are the same, maybe in principal like assessing profitability and reviewing financial statements. But your business is still unique and so will the buyer be. A business broker needs to have good communication skills and an understanding of business if they ever hope to market, negotiate and sell your business. You want to find the right business broker for YOU and YOUR business that will take some investigations.
Why it’s Never about the Commission Rate
When it comes to selling a house you will often choose a real estate agent based on their experience and the “Best Deal” you can get. We all know how real estate agents advertise and drive enquiries via the big real estate portals and their databases. Selecting an agent to sell your home verses selecting a business broker is very different. Choosing the brokerage or company with the “best rates” may be a bad decision for you and your business. The commission is generally a % of the sale price that the broker will earn when they sell your business. Keywords : “when they sell”. Whilst business brokers are driven to sell your business they are also working to obtain more clients and get more exposure. Finding the right buyer for your business is much harder than finding someone to buy a property. The new buyer needs to have an understanding of your business and ideally the industry as well as the necessary capital / finance and skills to buy the business and continue to operate successfully.
Business broking is a very niche industry with only 15,000 businesses on average for sale at any one time compared to millions in real estate.
If not commission rate then how do I choose a Business Broker?
The best way to asses a business brokers skills is to have a conversation with them.
Understanding their skills and knowledge of your industry is crucial to get your business sold in a timely manner and more importantly the right price.
A good business broker is well known and respected within the profession.
One of the most important roles of a business broker is to effectively communicate between the buyer and seller, so communication skills are very important.
Ask these questions to your potential business broker – Find out who is the right fit for YOU & YOUR business. There are some great business brokers in Australia who work hard for their clients to achieve an optimum price and successful sales.
15 Questions to ask a potential Business Broker
There are over 1000 active business brokers in Australia. Asking the right questions will help you make an informed decision.
- How long have you been a business broker?
- Do you specialise in a certain type or size of business?
- What Professional organisations are you part of?
- Do you have a licence and insurance?
- Can I get an appraisal of my business?
- How long do you think it would take to sell my business?
- How can I maximize the value of my business?
- How many similar businesses have you sold?
- How many businesses are you currently selling?
- How many similar businesses have you sold in the past 3 months?
- What strategies do you use to find buyers?
- How often will you update me on enquiries?
- What are you fees and marketing costs?
- How long is the exclusive agreement?
- Can I read your testimonials or speak with previous clients?