Choosing a business broker

  • by Mandy O'Keefe 
Sell a business

Finding the right broker can help a seller achieve the best price possible when they sell a business and identify likely buyers for their business.

The vendor should consider various factors when choosing a business broker. It is good practice is to always get a referral from a trusted source, so talk to various people such as accountants, lawyers, peers and industry associations and ask for names of reputable business brokers.

The International Business Brokers Association (IBBA) is a useful source when looking for a broker to sell a business; the non-profit organisation deals with various aspects of business brokerage, mergers and acquisitions. The IBBA has more than 1,500 members worldwide and provides a professional certification process, which aims to create a professional relationship with successful business transaction advisors.

The Better Business Bureau, which aims to foster a fair and effective marketplace, is another useful resource.

Examine your broker’s background, experience and credentials – in short, practice due diligence. Just as a prospective buyer would inquire about your business and carry out thorough research, sellers should follow the same process when finding a broker. 

Find out whether there are any complaints against the brokerage or if they’ve handled sales of your type of business before. Brokers understand the principles of business valuation and can provide a fair, objective appraisal, unlike the vendor, who has obvious reasons to overinflate the value of a business they’ve dedicated years of their life to building. 

If your company is worth millions then you’ll probably need an intermediary with a different set of skills, one schooled in the mid-market world of mergers and acquisitions.