Finding the Right Tucson Business Broker
If you are considering buying or selling a business in Tucson, and have decided to retain the services of a professional business broker, then here are some questions that you might consider asking each business broker you interview.
1) Tell me about your professional background, and experience as a business broker:
According to John Oberg, Associate Broker at Allen and Young, it takes time to develop the level of experience that is required to effectively play the role of a business broker. Industry research shows that the average business broker is over 55 years of age, says Oberg, which is explained by the fact that there is no substitute for business experience, time and practice to gain the knowledge that a broker needs in areas such as accounting, business valuation, sales, and customer relations.
2) Are you a member of any industry association? Do you hold any professional certifications?
Associations such as the Arizona Business Brokers Association (AZBBA), and the International Business Brokers Association (IBBA) exist in order to bring structure to the brokerage industry, and play a vital role in promoting a common standard of knowledge and practice through ongoing continuing education. In many states, including Arizona, a business broker need only obtain a real estate license. However, selling a home and selling a business are two completely different matters. Ask any business broker you may be considering hiring whether or not they are members of their industry association, and whether or not they have completed optional voluntary coursework and achieved any additional certifications. An affirmative response is one way of know that a broker is committed to their profession and has made an ongoing effort to keep up to date on required knowledge. A designation such as CBI (certified business intermediary), awarded by the IBBA, is a guarantee that you are working with an individual who has taken and passed relevant coursework and certification exams.
3) What types of business brokerage related services does your firm provide?
The primary task of your business broker is to assist you in determining how to price the business, and then package and market it for sale. A business broker should have strong financial skills, as well as be an effective salesperson and advocate for your business. Does the broker you’re interviewing understand business valuation? Can they show you examples of how they’ve marketed businesses they’ve sold in the past?
4) Who is the owner of the firm? Can I talk to them?
How did you first come in contact with the business brokers you are considering hiring? Did you contact them, or did they contact you? Or were you perhaps referred to them by a mutual contact? However you first came into contact with the brokerage firms you’re considering, and no matter whom you spoke with, it’s also prudent to ask to speak to the owner of the firm. Is the owner also the designated broker? Will he or she be involved in the sale of your business? Do you feel comfortable with their level of commitment? What recourse will you have if you do not believe that sufficient interest from buyers has been shown in your business?
5) How do you research potential buyers, and what tools do you use?
As the scope of information available at our fingertips via the internet inexorably increases, the process of buying and selling a business benefits. Now, businesses may be listed for sale to a nationwide, indeed international, network of potential buyers. Now, data is readily available about comparable business sales, past industry performance and future trends, etc. The business broker you choose to work with should demonstrate an understanding and proficiency with online research and market tools, particularly as it relates to accessing research data, digesting it in order to provide you fact-based insights, and effectively marketing your business far and wide in order to find buyers who are active in your industry.
6) What types of marketing strategies and tactics will you use to market my business?
Every industry is different, and no two businesses within an industry are the same. There are unique strengths (and weaknesses) to your business that differentiate it from any other similar business for sale listing. In turn, the approach to marketing and selling your business should be commensurately unique. Similarly, there a number of marketing strategies and tactics available to be employed by your business broker in order to sell your business. Do the brokers you are interviewing seem well-versed in most or all of the marketing vehicles available to them? Can they clearly articulate the approach they plan to take with your business, the marketing practices they will follow, and the rationale behind their recommendations? Are you convinced that the combination of these strategies and tactics, and the media vehicles (the broker’s own website, ads in papers and trade pubs, listings sites such as www.bizbuysell.com, www.BizQuest.com, etc) used along with them, will favorably represent your business to the broadest group of potential buyers, and command the highest price the market will reasonably bear for your business?
If you’re considering selling a business in Tucson or Southern Arizona, we’d love to answer any of these questions, and more, about Allen and Young Business Brokerage’s philosophy and practices.
If you’d like more information on this subject, please Contact Us.