How do you find a business broker? Locate the business brokers in your neighbourhood. Look at websites, look at http://www.thebusinessplace.com/business-brokers for brokers who may be in your area. Check the types of businesses they have for sale? Is yours a unique business that needs someone with a certain type of background? If you are selling widgets, does the broker have to have experience selling a company who manufactures widgets or will a person who is very knowledgeable about businesses with many investor contacts be sufficient? First look for successful business brokers who have sold businesses. Call them, get an idea if they sound like they know what they are talking about. Did they tell you what you wanted to here or did you learn something from the brief discussion? Ask to see what type of executive summary he has prepared for prior companies for sale. Ask if he has any references. Many old owners sell their company and move on so you may not be able to call the old owner for a reference but the broker may have testimonials from prior clients in his files. Ask what type of marketing the broker does. You do not want a broker who broadcasts your business to everyone. You want to make sure that your broker is discreet. You do not want your competitors to know that you are for sale. They can use that against you in their marketing efforts if that became public knowledge.
Meet the broker. Find out if they require a contract with an exclusive period of time, which laws is the contract under, how long is the exclusivity and if an investor who they introduces approaches you in a year, are you still obligated to pay the broker a commission? Can you cancel the contract if you change your mind? Are there any penalties for cancelling the contract earlier? What additional serivces does the broker provide? Doe they help negotiate the purchase and sales agreement or do they let the lawyer discuss this with you? Can they recommend an accountant (if you do not have one who has experience in tax planning) or do you need a lawyer and can they give you a recommendation? Do not use a lawyer who has no experience in closing a purchase and sale agreement. If your lawyer is a real estate lawyer who is doing you a favour, you may be better off to use a seasoned professional with experience. They may be more expensive in the short run but oversights by an inexperienced lawyer may cost you more than the fees saved. Is your accountant experienced with buying or selling a business? I just received a phone call froma person wanting assistance. They uncle was the accountant, he knew everything according to the caller but did not know how to value a business, what was a good price, how to negotiate the deal. If he was that good, why was the person calling for assistance but did not want to pay for someone else’s expertise? They called because they knew that the uncle did not know alot but they thought that consultants were going to provide them with free advise even they did not know the details of the transaction. Remember, it not what you sold the company for that counts, it is how much did you get to keep. Saving a few dollars to avoid paying consultants may reduce your out of pocket costs. The one things is you will never know if it cost you more money in the long run because the buyer of the business will never point out your mistakes when they are for their benefit.