- “How many years experience do you have?” You want a superstar with a proven track record they can back up with references. If a broker can’t provide a list of satisfied sellers, it’s a red flag.
- “How many business like mine have you sold?” A broker with experience in your industry is well positioned to successfully market your business. However, a long track record in your area and experience in related industries can make up for it. Ask them how they’ll compensate for their lack of experience with your type of business.
- “What is your Closing Ratio?” This is the ratio between businesses they listed verses businesses they sold. A closing ratio around 50% or lower isn’t much better that the 50-50 odds against selling your business by yourself.
- “Do you have relationships with private lenders to assist with Acquisition Loans? In an ideal world, every buyer has excellent credit and the huge down payment traditional lenders want. This is not a perfect world. When a broker can bring private lenders to the table, it benefits the buyer and seller alike.
- “Can you provide me with a copy of your Confidentiality Agreement?” If the broker doesn’t use a professional Confidentiality Agreement, move on.
Next up: What To Look For In A Broker’s Contract.