5 Factors to Consider When Choosing the Broker to Sell Your Business

When getting ready to sell a business, one of the first issues an owner must consider is the hiring of a business broker. Brokers can be especially helpful in the sale of a retail business because they handle a wide variety of tasks, including business evaluation, advertising or marketing the business, prospect interviews, negotiation, due diligence interactions, and other critical aspects of a sale.

Some retailers choose to sell on their own, but more often than not, successful business sales are accomplished with the assistance of a qualified intermediary. With the difference between a successful business exit and a total disaster hanging in the balance, here are five key issues I recommend retail store owners consider when selecting a business broker:

1. Qualifications. Look for members of the International Business Broker Association (IBBA), a state brokerage association or other type of trade organization. Some brokers are also designated as a certified business intermediary. These brokers have been through extensive training on the crucial details of business-for-sale transactions that can benefit you and your business.

2. Track record. Although a successful overall track record is important, it won't mean much unless your broker also has experience selling a store like yours. The retail industry has its own unique traits and characteristics. Unless your broker understands the nuances of the industry, it's unlikely they'll be able to accurately represent your interests to buyers. Find out how many businesses like yours the broker has sold in the last 12 months to 24 months. Then compare that number across a variety of brokers you're considering.

3. Strategy. A good broker can make the process of preparing and marketing your store-for-sale a lot easier. Ideally, your broker should walk you through a systematic preparation process that removes potential hurdles and maximizes business value, even if it means delaying the listing for a few months. Once the value is set, your broker's marketing strategy should begin with a compilation of materials that will be distributed to serious prospects, and should continue with creative, aggressive marketing ideas that specifically target individuals who have the ability to purchase the business.

4. Timing. The selling time for the average properly priced business is between six months and 12 months. The best brokers should be able to prepare and sell a listed retail business in six months to eight months, excluding businesses with extenuating circumstances. If the sale of your store takes longer, make sure it's for a legitimate reason.

5. Communication. For broker-assisted sales, my advice for sellers is to build personal rapport with your broker and trust their expertise. Communication is an essential element of the selling process, and it's not unreasonable to ask brokers how often you can expect to hear from them.

The right broker can help sell your business at the high end of the market, while the wrong one may be unable to complete a sale at all. With so much at stake, talk to at least three brokers before making a decision. With just a little effort, you'll find a broker who's able to sell your business in a timely manner — and at a great price.

Mike Handelsman is group general manager for BizBuySell.com and BizQuest.com.