Ready to Sell Your Business? Consider a Broker.
by Marcia Layton Turner
When the time comes to sell your business, you may decide to hand the task over to a business broker who has more experience than you in negotiating such deals. Or do they? What skills and experience should you look for when interviewing potential brokers to sell your company? Are you better off trying to sell your company on your own?
Brett Brohl, CEO of BoomBoomPrints.com is a serial entrepreneur who previously founded and ran four sites specializing in work uniforms, such as restaurant apparel and medical scrubs. Within three years, the companies had gone from start-up to highly profitable and Brohl's interests and energy were waning. He was ready for a new challenge. So he listed the uniform companies for sale on BizBuySell.com and went on with his life.
Several months went by without any serious offers, which Brohl concedes was probably because he simply wasn't focused on the sales process. A conversation with a fellow entrepreneur who had recently sold his business changed that, however.
"If you want real offers, you need to talk to a broker," he told Brohl, and recommended the firm that had helped sell his, Quiet Light Brokerage.
Comforted by the knowledge that there would be no fee for a broker's services unless the companies were sold, Brohl set up a face-to-face meeting with the owner to learn more about how brokers work. He liked what he heard and quickly signed with Quiet Light.
The companies were sold for near the asking price within three months. "It might have taken me two years to sell it myself," says Brohl.
Having tried to sell his companies himself and through a broker, Brohl offers the following advice for selecting the right broker:
- Be wary of any broker that requires an up front charge. Most brokers are paid when they sell the business, and not before.
- Ask for references. Talk to someone whose business the broker successfully sold, to learn about the experience and the results.
Brohl liked being able to meet face-to-face with a company exec, to get a better sense of the type of people who would be representing him. He thinks taking that step would be very helpful.
He selected a brokerage firm that specializes in selling websites and recommends all business owners find a broker that knows their industry. "Work with someone who's done it before," Brohl says. That factor becomes especially important when they're valuing your company.
Most brokers charge 10% of the sales price, but Brohl wishes he had tried to negotiate that down. That's the only thing he would have done differently in his experience selling his business through a broker.
In addition to assuming responsibility for selling the businesses, the brokers "brought credibility to the deal," says Brohl. Even before they agreed to sign him as a client, they did their own due diligence to confirm the company financials were legitimate. That up-front research gave Brohl's deal third-party credibility and may have helped him get his full asking price.
"If you want to sell quickly, [using a broker] is a good way to force yourself to move forward." Brohl says, adding that he "never would have sold as quickly" on his own.
About This Author
Marcia Layton Turner writes regularly about small business. Her work has appeared in magazines such as Entrepreneur, Bloomberg Businessweek and Black Enterprise, as well as at CNNMoney, Amex OPEN Forum, and Entrepreneur.com.
Cash Flow Challenges
Insights on the top cash flow challenges business owners are facing today.
Browse All Articles »
Sign Up Now
Receive an email with featured articles and valuable insights for today’s business owners.
Start Your Cash Flow Conversation
Give us a call at 1-855-762-2365 or fill out our simple form and a PNC Business Banking representative will get in touch with you.
Request a Contact »
Important Legal Disclosures and Information
PNC is a registered mark of The PNC Financial Services Group, Inc. (“PNC”). This article has been prepared for general information purposes by the author who is solely responsible for its contents. The opinions expressed in these articles are those of the author and do not necessarily reflect the opinions of PNC or any of its affiliates, directors, officers or employees. This article is not intended to provide legal, tax or accounting advice or to suggest that you engage in any specific transaction, including with respect to any securities of PNC, and does not purport to be comprehensive. Under no circumstances should any information contained in the presentation, the webinar or the materials presented be used or considered as an offer or commitment, or a solicitation of an offer or commitment, to participate in any particular transaction or strategy or should it be considered legal or tax advice. Any reliance upon any such information is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation. Neither PNC Bank nor any other subsidiary of The PNC Financial Services Group, Inc., will be responsible for any consequences of reliance upon any opinion or statement contained here, or any omission. Banking and lending products and services, bank deposit products, and Treasury Management products and services for healthcare providers and payers are provided by PNC Bank, National Association, a wholly owned subsidiary of PNC and Member FDIC. Lending and leasing products and services, including card services and merchant services, as well as certain other banking products and services, may require credit approval.