How Do You Deal With A Business Broker?
Business brokers are an essential part of the business sales process. They can help you find buyers, ensure that your information remains private during the sale, help you avoid financial and legal pitfalls, and guide you through steps like due diligence and paperwork.
Dealing with a good business broker is easy—all it takes is communication. Your broker should help you through every step of the process and give you all the information you need to make informed decisions along the way. Here are five ways you can ensure great interactions with your business broker:
Build Strong Relationships
Getting to know your business broker is a vital step in the business sales process. You need to work with a broker you can trust.
Business owners pour years of their lives into making their business a success. Selling it can be a long and sometimes painful process. You’re putting something that’s incredibly important to you in the hands of someone you’re just meeting—establishing a relationship built on mutual trust and respect is key.
Get to know the backgrounds of the business brokers you talk to. Find one who you click with on a personal and professional level. Ask them plenty of questions (more on that next), and meet with them often. You’ll find it’s well worth the effort.
Be Inquisitive, Ask Questions
Selling a business is an incredibly complicated process, and your business broker will be guiding you every step of the way. They’ll need a wide variety of documents, signatures, and business access to sell it successfully.
This can be a bit daunting for business owners; it’s always uncomfortable to be asked to do things without fully knowing why.
Information is the perfect antidote for uncertainty.
Your business broker will be happy to answer any questions you might have—and if they’re not, you should move on to a new business broker. Ask questions anytime you don’t understand what is being done or why something is needed.
From the due diligence process to ensuring non-disclosure, business sales are complex because complexity helps to protect all parties involved in a deal. Ask questions the whole way through, talk to your broker about prospective buyers and why they’re a good fit, and satisfy your curiosity!
Know When To Move on to the Next Deal
Not every deal is meant to be. You might find the perfect buyer—just to find their finances fall through. You might come across a buyer with all the cash in the world—only to find that they’re overly aggressive in negotiations, looking to make deals that aren’t worth your time.
When you’ve been waiting to sell your business for weeks—or even months—without a prospective buyer, it can be tempting to try to make these deals work.
There are buyers out there who are suited to your business. Your business broker will know when it’s time to give up on a deal—and they’ll advise you to. Scenarios like the ones we described above aren’t totally unsalvageable—new financing can sometimes be secured, and an experienced business broker will know how to deal with aggressive negotiation tactics.
There’s a certain point, however, when finding a new buyer is the best way to go. Keep in communication with your business broker—they’ll let you know when it’s time to move on.
Returning Phone Calls in a Timely Manner Is Critical
Business sales work on a strange timeline—you might hear nothing for days or weeks, only to be met by a flurry of activity when potential buyers start knocking. This could be because of a well-placed ad or because your business broker’s contacts have started responding to their outreach messages.
No matter what the reason, if your business broker is calling, you want to answer as quickly as possible. Business brokers have to move quickly—they need to communicate with you and all of your potential buyers. There are a lot of spinning plates—the faster you respond, the more likely a deal is to go through.
Your broker will need to contact you continuously throughout the sales process, even when you’ve got a buyer secured. There’s a slew of time-sensitive paperwork and activities that you’ll need to work your way through to complete the sale. By responding quickly, you’ll ensure that the process goes smoothly and help to avoid any potential legal or financial complications.
Continuous Communication With Your Business Broker Is Important
The basic premise we’re highlighting here is simple: Business brokers are at their best when they’re constantly communicating with their clients. By keeping lines of communication open, you’ll be able to foster a strong relationship with your broker—and that will help you end up with the best deal possible.
Ask questions! Talk to your broker when deals are taking time, and ask them whether or not the deal is still viable. Take their advice to heart, but don’t be afraid to question them about why they’re giving it—business brokers work for you, and they’re there to help.
Once you’ve got a potential sale in the works, it’s important to keep answering your business broker’s calls, emails, letters, or any other method they use to get in touch with you—business sales are extremely time-sensitive.
Talk to your business broker before you hire them (to make sure they’re the right fit), during the sales process, and even after your business is sold. Business brokers make for excellent contacts—and if you ever want to buy a business after you’ve sold yours, knowing one is going to be extremely helpful.
Jason Brice is a business broker in Vancouver with a deep understanding of the value of broker-client communication. Looking to sell your business? Get in touch with him!