Business Brokers: Acing the Interview and Getting the ListingFinding the right advisors when selling a business can be a challenge. But it doesn’t have to be. First off, most business owners will already have a relationship with a couple; an attorney and accountant for example. That’s a start – but only a start, because the RIGHT attorney and accountant are what’s needed. The RIGHT attorney decidedly is NOT the owner’s divorce attorney or the one that keeps getting their kid off on various speeding charges. The right attorney is a “transaction” attorney – one with experience in handling the sale of businesses. The same can be said of accountants. Not all accountants have experience in the ins and outs of selling a business. But what about business brokers?
Finding the Right Business BrokerProfessional business brokers and M&A advisors are arguably the “captain” of the transition team. We’re usually the one calling the plays and bringing in the right players at the right time. Orchestrating the cast and sequences is our job. Having the right business broker will keep the process moving and help it stay on track. But how does a business owner find the right broker? The key is to interview a couple. And when business owners interview brokers, some of the questions they ask can be anticipated. As professional business brokers, we need to be prepared for those questions. With more than 20 years in the business-brokering trenches, we’ve gone through this process with owners dozens of times and we know what questions we’re likely to get. If you’re a business owner considering selling, this discussion will help you prepare some of the questions you should be asking brokers and advisors. And if you’re a business broker, this discussion will help you anticipate some of the questions you’ll likely get – and to prepare your responses appropriately.
Question: “How will you handle confidentiality during the selling process?”When selling a business, confidentiality is critical. Not all business broker or M&A firms will have a very detailed, well-defined process for protecting the confidentiality of the businesses they’re hired to sell but failing to maintain the highest level of confidentiality is the fastest way for the market to know that a company is for sale, which is guaranteed to create problems for the owners with their employees, customers, and suppliers. We have to be able to clearly explain to our potential clients that we understand how critical this aspect of the process is and what we do to ensure that confidentiality is maintained from start to finish. In our Course, “Learn How to Value and Successfully Sell Businesses”, we describe the many facets of confidentiality and how to assure potential clients that we are able to maintain it. We also advise our clients how to handle a surprise phone call from someone inquiring about a possible sale.
Our course, “Learn How to Value and SUCCESSFULLY Sell Businesses“, teaches you how to value and sell businesses.
Become a Professional Business Broker…Most importantly, we let our clients know that, if news that their business might be for sale gets out, it will be from a breach on their end, not ours. Many owners have not thought about confidentiality or how important it is to the successful sale of their business. Properly explaining how – and more importantly, why – we focus on it, allows us to be seen as true professionals with our client’s best interest foremost in our mind.
Question: “What is the size of the transactions you usually handle?”In our case, we work in the Main Street and Lower Middle markets. That is, businesses with transaction values of between $250,000 and $20 million (though some of our brokers handle smaller deals, especially when they’re just getting started). We are not – and have no intention of becoming – investment bankers competing in the $100 million market. We tell our potential clients up front that this is the range that we’re most experienced in and that, if their business is larger, we’d be happy to refer them to a firm that has more experience with larger deals. But there are millions of businesses around the world that fall into our size range. We recognize that we can’t and don’t want to be all things to all people – and I advise new brokers to adopt this position. It reflects positively on us if we refer potential clients to someone who can better serve them. We’ve found that advising our clients about our self-imposed “limitation” enhances our credibility.
Question: “How will you market my business?”The answer to this question depends to some extent on the business and is a subject covered in depth on our Course. Is the buyer likely to be financial or strategic? Is it likely to be a private equity group or an individual – or another business? Though there are common marketing components for most businesses that we bring to market, the type of business being sold will suggest to us the types of buyers we should target and that, in turn, will inform some of the marketing aspects that will be specific to a particular business. That sentence is a general answer to the question of how you’ll market the seller’s business and we use some version of it before we ask the seller questions about the business. The answers the seller provides usually allow us to get more specific. Answering in this manner is another way we buttress our credibility.
We’ve launched a coaching program specifically tailored to Realtors that want to sell businesses, business owners and to anyone that wants to become a business broker.
If you’d like to learn more, email me at joe@WorldwideBusinessBlog.com