As an experienced broker, I will tell you that most business owners are so involved with operations and management, they cannot do a good job marketing their companies for sale.
BEWARE OF SCHEMES. I have represented business sellers who previously paid in excess of $30,000 to a marketing company that was going to sell their business. It began with seminars about how to sell your business. The fee was necessary for marketing materials and an elaborate valuation. The sellers report not a single buyer prospect was produced. Commitment fees to sell a business should never exceed 10% of the entire success fee for a completed transaction.
KNOW WHOSE INTERESTS ARE FIRST. Unlike with real estate, business brokers are not required to cooperate with other brokers. I have experience first hand a broker saying no to a buyer prospect because they were represented by another broker. YOUR BROKER COULD BE KEEPING BUYERS FROM YOU. Make sure your representation agreement states that your broker will cooperate. Trying to keep the entire commission for themselves does not serve you, the client.ALWAYS ASK FOR REFERENCES. A good broker will have proven themselves to a number of clients and advisors. Accountants and attorneys are a good place to ask. Most of these advisors are not salespeople or expert marketers, but should point you in the right direction.
KEEP GOOD RECORDS. Without good books, any business is most difficult to sell. Be current on your tax returns. Always track any expenses that will go away with a new owner. These can create more value in your business.
Feel free to contact me with any questions you may have at [http://www.jpbusinessbrokers.com].
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