If you’re currently searching for a reliable and competent business broker in Utah for your planned sale or purchase of a business, you should not grab the services offered by the first broker you meet.
Just like with a lot of things in life, you should exercise caution and do due diligence before hiring a business broker to facilitate your business sale, whether you’re selling yours or buying that of other people. With this, you can be sure that you’re making an informed choice, and you won’t end up finding yourself in a tight bind because you acted rather brashly without thinking things over a few times.
Here are five essential things you must know about business brokerage and hiring a broker:
Your broker must be certified
You don’t want to end up hiring a business broker who is industry certified, so you’re assured of his competence and legal entity. A Certified Business Intermediary (CBI) knows the intricacies of the whole business brokerage process so he can safely navigate through it to ensure a successful deal. Such a broker also has the right connections to make paper works run smoothly and to guarantee that every step of the process is done according to industry standards and related laws.
Your broker must know your company before making any move
A sensible and experienced broker won’t just accept your offer to broker the sale of your business and then advertise it outright in the hope of making a quick commission.
On the contrary, a business broker who is worth his grain of salt would spend time getting to know everything possible about your business: who your employees are, what your current financial standing is, and what features and advantages your business has. Based on the pieces of information gathered, your business broker can put together a teaser and Confidential Information Memorandum (CIM) to be presented to prospective buyers. These are two critical materials that could make or break your planned sale, and your business broker should know how to create compelling ones.
Your broker must connect you with the right buyer or seller
Whether you’re selling your business or you’re looking to buy one, your broker must connect you with the right buyer or seller based on your specific interest and budget limitations. If you’re selling your business, the broker should pre-screen offers to find the one that would best serve your interest. If you’re the one buying a business, the broker must match your interest with a business that you would have a great chance of excelling at. This is where the broker’s expertise comes into play.
You should be able to negotiate the broker’s fee
If a broker flatly asks how much you’re willing to pay or gives his fee schedule during your first meeting and signifies that it’s firm, then you better think twice about hiring that person.
A professional broker should be open to negotiations with the client as regards professional fees. Typically, brokers make a 10% commission from each successful sale, but it’s not, at any rate, a baseline figure. In fact, if you already have a clear prospect whom you think would grab at the chance of buying your business, then it could be your bargaining chip to lower the usual broker’s fee.
You should hire a broker with a sterling reputation
It’s not enough that a broker is certified; he should also have an immaculate reputation to go with it. As such, be sure to do your homework and find out if the broker you’re aiming to hire has a solid background in facilitating business sales. It’s one great way of gauging if the broker is a great hire or if you should look for a better candidate.