Guide to Business Brokers

If you're selling, the broker may also charge a retainer fee to cover costs associated with marketing the business. Unless you have extensive knowledge of the market and a lot of time to do the legwork, a broker may be your best bet.

A broker will help:

1. Prescreen businesses for buyers. Brokers don't want to represent businesses that are overpriced or are reluctant to open their books.
2. Cut through the mountains of paperwork (including everything from financing and escrow to licensing) associated with the sale of a business, saving both parties time and money and assuring the deal is carried out legally. Brokers serve as a go-between for the lawyers, CPAs, bankers and other agents needed to close the deal.
3. Negotiate the deal, making the most stressful (and important) part of the process smoother and ensuring a fair price.
4. Guide the buyer to the right business that matches his background and goals and provide advice throughout every step of the process.

Tips & Tactics
Helpful advice for making the most of this Guide

• Sealing the deal: To save some money on fees, you may want to hire a broker just to handle the negotiations.
• Early innings: If you're serious about buying a business, make a reasonable offer early on because the seller will only allow the broker to show you the company's books after getting an offer. You can always withdraw the offer later.
• Do your homework: Talk to other people who've worked with brokers as well as your lawyer, CPA and chamber of commerce to get a list of good, trustworthy brokers.

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