Six Questions to Ask Before Hiring Business Brokers

If you are thinking of selling your business, then a wise decision would be to hire business brokers in Dallas for the job. There is no denying that as an owner of a business, most people do not know the art of negotiation, which is the most important part in a business deal. Like a businessperson knows about his/her consumer market inside out, business brokers know all about current market valuation trends, tactics, and prices.

For instance, a situation where you might assume that you got the better end of a deal, business brokers in Dallas are still able to find some wiggle room for cash in it. Professional business brokers have the experience to sell your business at a value that is higher than your current business value and profits. On the other hand, amateur business brokers in Dallas will keep your business on the market for too long, costing you money and time.

Following are six questions that you should ask business brokers in Dallas before hiring them:

1-   How Long Have You Been A Business Broker?

Hiring independent business brokers in Dallas can be quite risky. These people do not have much experience as compared to professional brokers working for a company. However, the selection process does not end here. While a company might be operating for years, it is not necessary that their employees have been doing the same. When you hire a business broker, ask for his individual experience as a broker. Then, interview the owner to find out how long he/she has been in this business.

In some cases, the owner hires amateur business brokers as a front, while they operate in the back, working selectively with few clients. This can be a huge problem as your demands can get lost in the miscommunication. If this happens, it is better to keep interviewing other firms.

2-   How Many People Have You Helped In Selling Their Business?

This is a simple question and can give you a huge insight into the workings of the broker company. Back then, when a firm did not have a website, people usually thought that they were operating illegally.

However, nowadays, social media and review websites have made it easy for us to read reviews about a certain company’s services and products. The more the reviews, the more you can know how people view their services. While this might not give you a specific number, you will be able to satisfy yourself that you have hired a good company.

While business brokers in Dallas do not give other clients’ details due to confidentiality, you can ask the next question to find about their service’s quality.

3-   How Many Businesses Have You Sold In A Year?

At an average, a broker company sells about ten businesses in a year. If the company sells less than five businesses in a year, there can be two reasons for it:

  • The businesses they were selling belonged to a huge franchise and the processing took time
  • They are not good enough or lazy

Now, it is up to you to figure out, which is the case. This answer is extremely important in order to move forward. In the former case, it would be wise to do a little more research on the company. However, in the latter case, it is better to start searching for new business brokers in Dallas.

4-   Can You Provide Me With Any Reference?

A legit broker company will have a list of contacts like buyers, lawyers, financial advisers, lenders and accountants with whom the business brokers have worked with. There might be situations where you are in need of finance for the initial down payment or you need permits for the equipments to sell to the buyer. A broker must be able to provide you with all the legal help you require and then some. If they recommend the services of these people then, be glad because you chose the right broker.

This can also work in your favor later when you are trying to buy a new business. Not only will you have trusted business brokers in your pocket, you will also have financial help on your hands that will help you to start your new business.

5-   What Other Listings Do You Have?

Listings here refer to the number of businesses on sale, a business broker currently has. An average business broker has fifteen to twenty listings. A company having listings less than this can be due to the following reasons:

  • They are new
  • They do not want more than ten listings at a time
  • They do not have much experience in obtaining listings
  • They are more experienced at selling listings

Obviously, number three is a huge problem, which means that the business brokers do not have that much experience. However, sometimes this does not affect your business. As long as the company claims any of the other reasons, your business is in safe hands.

6-   How Much Money Will You Put Into Marketing My Business?

Business brokers do not have any say in how much money will be spent on marketing the business. Usually this is the end process and the amount of money to be spent on your business is decided by the company’s owner. Before finalizing the sale, it is better to ask the owner what his/her marketing strategies will be for your business. This will give you an idea about how soon you will be able to get the money your potential buyer promises. This will also give you an idea about your business’s worth and how well it will fare in the market.

The process of selling a business takes around nine to twelve months, depending on the size of the business. Of course, the efforts of the business brokers in Dallas and their contacts can speed up this process and get the job done in six months. Another factor that weighs in on this time is your demands. Therefore, most business brokers advice people to set reasonable contract terms and selling price.