Congratulations! You’ve already done much of the leg work in getting your business ready to sell by organizing all of the documents, taking a big picture view of the existing marketplace, and scheduling a consultation with a business broker. Once you’ve made the decision that you have selected the right business broker to partner with, this is only the beginning of a process that could take some time. It is important to understand some of the steps you should be aware of in order to maximize your chances of success with the right broker.
First of all, ask the broker how you will communicate with him or her over the duration of working together. The ability to return phone calls in a timely fashion is essential for you to be able to get the information you need about your company. Make sure that the business broker you select has an existing structure in place to get back to potential buyers. If the business broker delays calling back buyers, this means that a qualified and strategic purchaser of the business might have found another opportunity by the time your broker falls back.
Business broker responsiveness is key in this decision. Along the same lines your business broker should be responsive in getting things accomplished and moving things along the entire duration of the sale. When parties are moving forward on a deal at all times, this can kill the deal. Continuous and constant communication should be expected with your business broker from the moment you list the company for sale. These expectations should be communicated to your broker upfront after you sign the listing agreement.
Make sure that you clarify how and when you will hear things about the company being listed for sale, such as will the broker only call you when something is going on or will they update you once a week. Weekly dialogues can be beneficial between the seller of the company and the business broker. See how things are moving forward and to identify any potential challenges. This is your opportunity to get any feedback on all buyers who expressed an interest in the company for sale, and to find out how many buyers have responded overall. Some businesses will take an average of 6 months to 2 years to sell.
However, if your business broker does their job correctly, your company should easily be listed and sold within 6 months. Review the listing agreement with your business broker carefully to make sure it is in line with what you expected and what truly protects your best interests.
This contract and listing agreement should include the length of time they will be representing, how they will market and advertise the business for sale, including the budget and the details, how often will you be communicated with regarding deal updates and buyers, if and when the agreement expires, and what happens upon expiration, and how other business brokers and agents on your listing will be cooperated with. Having everything in writing at the outset of the decision to work together clarifies expectations and minimizes the possibility for confusion or disagreements between you and your business broker.