Locating Right Business Broker Part of Seller’s Exit Strategy
Finding the right business brokerage company is an absolutely critical part to a business seller’s exit strategy. The sales process should not entail any up front costs as any reputable business brokerage firm will be glad to give a free comprehensive business evaluation as part of the interviewing process. Finding a trustworthy business broker involves verifying that the broker is properly licensed, analyzing their online reviews or testimonials, looking at the business broker’s current business listings, and obtaining a business evaluation from the brokerage firm.
Business Brokerage Firm Must Be Properly Licensed
- The Florida Department of Business and Professional Regulations (DBPR) licenses real estate professionals in Florida.
- The sale of businesses is governed under these real estate license provisions.
- Thus if an individual is purporting to broker the sale of a business in Florida, then he or she must be a licensed real estate agent or real estate broker.
- Moreover, any publicly displayed advertisements for the sale of businesses in Florida must include the full name of the licensed real estate brokerage company.
- The first step to gauge the trustworthiness of a business brokerage company is to go online and verify whether the individual and firm are properly licensed.
View Online Reviews of Business Brokerage Company
After determining that the brokerage firm is properly licensed, the next step to gauge their trustworthiness is reading reviews or testimonials from past clients. The online reviews from buyers and sellers will typically say much about the professionalism and expertise of the business brokerage firm. A negative online review should always be taken with a grain of salt because of the possibility of misleading reviews from disgruntled folks who simply thrive on creating negativity. But multiple negative reviews are a far more serious issue. Testimonials on the brokerage firm’s website or online (such as google review) from previous clients who have successfully sold their company are by far the best source of reviews.
South Florida Business Sales Not Publicly Disclosed
One note of caution about online reviews is that in the business brokerage industry, past sales are not publicly disclosed. Business sellers and business buyers often want to keep the sale private (and there is no legal obligation to report the sales as in real estate sales). So a professional business brokerage firm will be far more cautious in identifying the actual name of the sold business, and will only do so with the express permission of both the buyer and seller.
View Current Listings of Business Brokerage Company
The typical real estate brokerage company has no current listings of businesses for sale. That is because they do not specialize in the sale of businesses. They specialize in the sale of residential or commercial real estate. There is an enormous difference between selling real estate and selling businesses. Very few brokerage firms sell businesses, and it is even more rare for a brokerage firm to exclusively sell businesses.
Trustworthy Business Broker Has At Least Ten Active Business Listings
- It is strongly recommended that prospective sellers go online and visit the website of any brokerage firm they are considering hiring for the sale of their business.
- The website should list the brokerage firm’s current and active listings (note that many websites list other brokerage firm’s listings rather than their own) of properties or businesses for sale.
- If the website does not show at least ten listings of businesses for sale, then the brokerage firm is almost certainly not actively or exclusively selling businesses.
- Without a sufficient number of active business listings, the brokerage company simply will not have the expertise or experience necessary to sell businesses.
- They also will not survive financially without a sufficient number of active listings.
- Moreover, they will not be able to attract the many buyers who naturally gravitate toward brokerage firms with a large number of listings.
Obtain Free Business Evaluation to Gauge Trustworthiness
Ultimately, the best way to determine the trustworthiness of a business broker is to actually meet the broker and receive a free business evaluation. During the business evaluation, the business broker should go through the financials with the seller and carefully analyze every relevant aspect of the business. The business broker should then discuss a suggested asking price. Most importantly, the business broker must explain how the asking price was derived, and be able to articulate the justification for the suggested asking price. The business broker should then explain exactly how they would best sell the business, and answer all of the seller’s questions about the listing process. The evaluation process is the ultimate test as to whether the business broker should be trusted to sell a business.
Finding the right business brokerage firm is a critical step to selling your business. With the right business broker, a business seller will have a much better chance at a smooth sales process that results in the best possible purchase price.
Give Martin at Five Star Business Brokers of Palm Beach County a call today for a FREE evaluation of your business.