5 Steps for Choosing the Right Chicago Business Broker
The decision to buy or sell a business is just the first step in a long process.
The decision to buy or sell a business is just the first step in a long process. Most people beginning the M&A journey are experienced at running a business, but much less skilled at purchasing or selling one. A professional broker can help bridge this knowledge gap, acting as your ally and advocate during the sale process. They navigate the complexities of the sale, and can even drive value. So how can you choose this important person? These five strategies can help.
Hire a broker who is familiar not just with your industry, but with your local market. Knowing the local market is an important asset when you negotiate the price. A knowledgeable broker can help you understand important value drivers.
Talk to References
Before hiring a nanny or contractor, you almost certainly talk to references. Follow the same strategy when choosing a business broker. Ask for a few references from companies they have previously worked with, aiming for at least three names. If the broker has recently taken a hiatus, changed sectors, or is new to the industry, ask for another professional reference, such as a colleague or teacher.
Do Some Google Sleuthing
Google their name, location, business, and other information that will likely bring up references and reviews. Google is a font of useful knowledge, especially if a broker has left behind a trail of angry customers. So check for news stories or lawsuits. Then visit their website or other professional source. If you can’t find much information, this may not mean anything, but ask the broker why their online presence is lacking. They should be able to explain how people will find your business if you hire them.
Know the Importance of Niche Work
Some of the best brokers specialize in a specific niche, such as restaurants or dry cleaners. Many of the skills used in business brokerage are relevant across industries, but some are highly specialized. If you have a niche business or work in an industry that requires specific knowledge and skills, it’s best to partner with a broker who knows that industry. Generic experience is insufficient. You need someone who knows your industry like the back of their hand.
The Coffee Date
Choosing a broker is a little like dating. You’re going to be spending a lot of time with this person, so you need to ensure you can tolerate being around them. After you've narrowed down your choice to two or three candidates, ask them to get lunch or coffee. You need to feel comfortable with this person, and see how they present. After all, they will be representing your business. Do they represent themselves well? Choose the person whom you can easily envision yourself working with who left you with the most positive first impression. If you like that person, odds are good that potential buyers will like them, too. And that’s half of the battle when you’re trying to convince someone to invest in your company.