How To Interview a Business Broker
by North American Alliance of Business Brokers
It is very important that you thoroughly interview your business broker before signing an agreement with him or her. FYI – please do not ask for references as part of the interview as a good business broker protects the confidentiality before – during -and after the sale.
Recommended Interview questions to business brokers…
- How does the business broker protect confidentiality and can they demonstrate the confidentiality processes? They should have all written materials including the confidentiality documents to leave with you for review
- How does the business broker qualify buyers and can they demonstrate it? They should have all written materials including the confidentiality documents to leave with you for review
- What types and how many lending sources does the business broker have that are readily available to finance the buyers? They should have multiple levels of lending sources.
- Is the business broker fully trained, certified and supported by a reputable source and can they verify it? This would include a contact person to verify it.
- Is the business broker willing to leave you full disclosure materials on their entire process and philosophy? They should have all written materials including the buyer and seller agreements to leave with you for review
- How diversified is the business broker as far as networking affiliations to find qualified buyers for the businesses for sale. They should be able to list at least a half a dozen affiliations and networking sources – THESE ARE NOT proprietary
- How many listing does the business brokers and their agents take. If it is more than 10-12 listings per broker or agent then how could they possibly give your business for sale the time and resources it needs.
- Ask the business broker who they work for – you or the buyer. This should always be YOU unless dual-agency is a requirement (certain Canadian Provinces only)
- How does the business broker get paid? At closing – never before – unless you agreed to a legal retainer to be represented.
BAD BUSINESS BROKERS CAN DESTROY THE PROCESS