Do I Need a Business Broker to Buy a Business?
Buying a business is an important decision that will impact the rest of your life. At this point, you’ve done the research and know this is definitely what you want to do. You’re here because the next question you’re asking in the process is, “Do I need a business broker?”
While we can’t answer that question for you, as we feel it varies on a case-by-case basis, we can provide you with everything you need to make an informed decision.
What a Business Broker Can Help With
A business broker can help you navigate through the entire business-buying process, which can be both stressful and time-consuming. And they can offer you access to business-for-sale listings and information that you normally might not be privy to. Chances are, whatever business you are thinking of buying, they have hired a skilled broker to facilitate the sale. Why not have someone in your corner?
Business brokers typically perform tasks that range from anything as simple as setting up a meeting between buyer and seller all the way to managing every detail of the transaction. You’re in the driver’s seat here. Know what you might want from them ahead of time so you can be on the same page and work out an appropriate agreement if it gets to that step.
Get the Most Out of a Business Broker
Business brokers are, no doubt, most effective when you provide them with a clear directive of exactly what type of business you’re looking to buy and how much you have to spend. Because the bottom line is this: Most business brokers work on commission, so if ultimately you don’t buy a business, then they cannot be compensated for any of the work they have done for you.
You may be surprised by this, but the majority of potential buyers that brokers work with never even buy a business. As this is a broker’s livelihood, this is always in the back of their mind unless you provide a very clear mandate up front. Think of it as giving them extra motivation to help you achieve your goal. So, before you go any further, ask yourself, “Am I really ready to do this?”
Proceed with Caution
If at this point, you think you are going to enlist the help of a business broker, we have a few suggestions. The most important: always work with established or recommended brokers. While this won’t guarantee a great experience, it definitely won’t hurt.
Here are a few questions to ask when seeking out the right broker for you:
- What are their qualifications?
- What are their specialties?
- What do recent clients have to say about them?
- What fees will they be charging and for what services?
One thing is for certain: a broker’s main concern is to make money. They won’t be spending any unpaid time in search of your perfect business. They’ll be acting in his/her own best interest, as are you. They’re priorities are, as follows:
- Getting a deal done.
- Getting it done for as much money as possible.
But again, we reiterate. You’re in the driver’s seat here. Make sure any broker that you end up working with is one that gives you a good vibe.
Money Matters
Bottom line: It’s not totally necessary to have a business broker in your corner when buying a business, but it can be helpful. The more you plan on spending on a business, the more you might want to consider it as part of your investment.
If, however, you’re a buyer of a smaller business and don’t want the added cost of hiring a business broker because you think it may be cost-prohibitive, perhaps consider coming up with a pre-arranged agreement to have a trusted broker on hand as a consultant on an as-needed or fixed fee basis.
Like we said earlier, whether you do or don’t work with a business broker is entirely up to you. This is your business, your money and your life.