Broker Selection

When evaluating various business brokers, ensure that you have a complete answer to all your questions. New Jersey remains a State with no regulation or licensing required to be a business broker, thus, your evaluation becomes ever so more important to selecting the right individual. 

Credentials
  • Is he/she a business broker, or merely a real estate broker peddling in businesses?
  • Is he/she affiliated with key business brokerage organizations?
  • What is the educational background of the broker? Verifiable?
  • Does the broker have a financial education, is he familiar with tax issues?
  • How long has the broker been in business?
  • Is the broker the principal, or simply an employee with little vested interest?
  • Other than the brokerage business, has the broker run an own business before and thus, can relate to your concerns? 
Value of Your Business
  • How does the professional plan to establish the value of your business?
  • Does he work with reputable valuation firms?
  • Is the valuation simply an in-house computer estimate (with a large upfront fee)?
  • Can he show valuation samples, and how do they relate to your business?
  • Will the valuation firm “stand behind” the appraisal if need be?
  • Will there be a “free update” of the valuation in a year from now, if needed?
Confidentiality
  • How will the broker ensure confidentiality of your business?
  • What is the buyer qualification process? In writing?
  • Can the professional show you specific documents?
  • Will you be protected from unqualified “tire kickers” and “wanna-be” buyers?
Upfront Fees
  • Is the broker confident in selling your business or does he request an upfront fee?
  • Does the broker charge advertising, traveling or any other costs?
  • Is the broker’s work simply a performance based fee upon a closed deal?
  • How much is the professional at risk with his efforts?
Marketing
  • How will the firm attract buyers for you?
  • Can he/she show you a marketing plan?
  • Is he/she operating within a network or simply as sole practitioner?
  • Does your broker share commissions outside of a network?
  • Does the broker have international experience to attract foreign buyers?

These are all valid question you should raise when evaluating a broker. They are important in finding the right individual to work with you in obtaining your goals.
Prior Client Assignments