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The Business Broker As Your Navigator

Feb 15, 2020

In Part 2 of this blog segment, we’ll look at the Business Broker.

At Iconic Advisers, we work closely with business owners on a daily basis to manage the entire selling process.

To give you greater insights as to the process, we share here our experience about things you SHOULD DO and SHOULD NOT DO when undertaking the sale of your  business.

 

Part 2 – Hiring a Business Broker

 

BUSINESS BROKER DO’s

  1. DO Enlist the help of your accountant and attorney (or industry peers) to find a broker
  2. DO Ensure that an Engagement Letter is in place between you and the broker
  3. DO Understand the compensation to be paid to the broker and whether there are any conflicts of interest
  4. DO Read and understand what exclusivity means if the broker’s services are terminated prior to a sale

 

BUSINESS BROKER DON’TS

  1. DON’T Hire a broker without industry-specific knowledge
  2. DON’T Work solely on a verbal agreement and handshake
  3. DON’T Hire a broker who is incentivized by the buyer via a “finder’s fee” in addition to getting seller to pay as well
  4. DON’T Agree to any unreasonable period of exclusivity or term of service (e.g., more than 12 months)

Knowledge Matters

When looking to sell your business, keep in mind it’s not just a simple process of speaking with prospective buyers that results in an offer and then signing a standard Purchase & Sale Agreement. There can be many pitfalls along the way. Working in combination with a professional team of advocates (Accountant, Broker, Attorney) will help ensure that the selling process leads to the best possible outcome for you.

Keep in Mind…

• Buyers are always in the market for profitable businesses
• Your accountant, attorney, and broker must all work together to achieve your goal
• There are good and bad ways to approach a prospective buyer
• There are many DO’s and DON’Ts related to selling your business
• Look for an experienced M&A adviser who knows the industry and can speak to all business topics: accounting, business software, legal, tax, operations, personnel, and retirement-related issues

What You Can Do

If you are thinking about selling your business but aren’t sure what your business is worth or how to go about initiating a sale, we are here to help you. Contact us for a free one-hour exit planning consultation. It is confidential and without any obligation. You only have to share a few things about your business, and we will make an overall assessment and answer any questions. This free consultation should help you in making sure that such a life-changing decision to sell is right for you.

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