What Do I Need To Know Before Start Working With A Business Broker?

Like all the other type of brokers (home brokers or share brokers, for example), business brokers are a sort of a medium and a mediator between the two parties which are interested to exchange certain goods. In this case, the ‘goods’ in question can be a smaller (or a larger) business. Simply put, there is someone who wishes to sell their business (for whatever reason), instead of putting it down. Also, somewhere out there is someone who wishes to purchase a business that is similar to the one that is being sold. The job of the broker is to connect the two interested parties and to negotiate all the relevant details of the arrangement. So, the job of a business broker and a house broker do not differ much, as it seems.

The only thing that significantly differentiates this kind of brokering from all the others is the fact that the business brokers tend to be paid by the sellers, instead by the person who wishes to purchase a business. This is something that the buyers have to be aware of, because this fact can greatly influence the whole proceedings.

Here are some things that you absolutely have to pay attention to before hiring a business broker to arrange a purchase or sale of a business.

The qualifications

The first thing that you have to get acquainted with is the qualifications that the broker has. Naturally, you should always pick the one that is more qualified. So, when interviewing any broker, feel free to ask following questions:

●     ‘Are you a certified broker?’ - To best answer this question, the broker will have to show you that he or she is a Certified Business Intermediary (CBI). This is the best proof of qualification, as this certificate is considered to be the cornerstone of any brokering activity.

●     ‘How long have you been in the brokering business?’ – The more he or she has been a part of this, the more experience he or she will have. More experience usually means better service, so go for the more experienced ones.

●     ‘Are you a full-time or a part-time broker?’ – The difference between these two types will show in the times of an emergency, when a part-time broker might not be available because of other obligations. A full-time broker will be able to devote himself to your case completely.

Web presence

Most brokering work in all the fields is nowadays conducted online. This means that a good broker will have a well established web presence. To check how's that works in practice, you can visit http://www.bizlistings.com.au website. If you want to check just how good the web presence of the broker is, you need to visit the website, first. On the website, you need to check how fast it loads, whether it is easy to use or not and the availability of the information. See what types of businesses they have in their databases and see whether they suit your needs. If you like all this, then you can proceed to asking them about the traffic that the site generates, the number of buyers and sellers and similar technical information.

The reputation

Go for the standard word-of-mouth way of gathering information about how reputable the broker is. Find the people who have already done business with the broker and ask them about their experience with that particular broker or brokering company. Comparing previous experiences is one of the best ways to find whether someone is worth your time or not.

The ways of payment

Another important thing to check is how the broker charges for his or her services. The most usual way of charging is that the broker takes the 10 percent of the whole value of the deal. However, there are other brokers who charge their services differently. Also, some brokers tend to have other fees involved while negotiating a deal and you have to be aware of these, so as not to be caught surprised when the brokering bill comes.

Conclusion

These are a few things that you have to pay attention to when you hire a broker to represent you in the business market, either for sale or acquisition of a business. Finding a good business broker can sometimes be difficult, but if you search well enough, you will be able to find him or her. Just make sure that you follow the guidelines when you interview them and you should be all right.

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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