I have met thousands of business owners over the years, and the majority of small to medium-sized business owners/entrepreneurs are Independent types who are self-made. They have learned how to manage and have been successful at learning new skills.

Because of this independence and resiliency many believe they do not need a business broker. (Although statistics show that this mind set has been changing as more business owners look to hire experts to help them exit) They believe that they can learn how to and do it themselves.

Many studies have been done over the years by several associations and the conclusions have been consistent. Business Brokers often get more money for a seller.

Here are the six Points to consider when making a decision on a Business Broker.

1. A good Business Broker will determine value not just using formulas, although they are very important, but by using personal experience and by asking questions to uncover hidden plusses and minuses to value. Often, they will suggest possible solutions to increase value.

They will remove a great deal of emotion from the owner, allowing them to make logical common-sense decisions. By acting as an intermediary, a business broker can cool emotions on both sides and keep a deal moving forward that might have otherwise fallen apart.

2. Save Time and maintains confidentiality. They do this by filtering out literally up to hundreds of tire kickers who want to learn about the business and saving the owner hundreds of hours of wasted time, This will allow the owner to continue to run the business. Selling a business can be a full time job in itself.

A good broker must have a system to maintain confidentiality. This is perhaps the number one concern of a business owner. Making sure employees, suppliers and customers do not get any idea the business is for sale is paramount. This is very difficult for an owner to do while dealing with buyers and still running their company. From Engagement to Closing a transaction is typically 6 to 15 months. Many Business owners just do not have the bandwidth to do this on their own.

3. Highest Price and Best Terms. Studies show that business owners who sell themselves often leave money on the table. A Business Broker should know how to run a no asking price “auction” for your business while still maintaining confidentiality. By making buyers compete, the best and highest offer the market will bear is arrived at. This “Controlled Informal Auction” process is a topic for

another long paper but with that said, a Seller/Business Owner should make sure the Broker is utilizing the latest processes for attaining maximum price.

Looking for a Broker who is a CBI (Certified Business Intermediary by the International Business Brokers Association) and/or an M&AMI (Merger and Acquisition Master Intermediary as certified by the Trade Association The M&A Source) is a good way to be sure you are getting a well educated and experienced Broker.

4. Closing the Sale and Transitioning a business is a long process. 300 to 800 hours of the Broker team’s time is the usual. Most of these hours are after the LOI is signed. In my experience a deal can be in danger of falling apart six times on average from Letter of Intent to closing! A Business Broker must have the skill to put the deal back together as many times as is needed. The business owner should select an M&A advisor who is a strategic partner, who listens and who is interested in a long-term relationship of trust building. The Business Intermediary/Broker needs to not be afraid to honestly speak up when they think the owner needs to hear something they may not like or want to hear.

5. Pre-Planning. The Business Intermediary/Broker should be capable of getting involved at the time of sale or, even better one to three years before the time of sale. They should be able to consult with you years before the sale to help “tune up” the business for maximum value.

ROI utilizes our Exclusive “Value Maker “System and there are other similar systems available as well. Sometime a Business Intermediary needs to suggest the Seller wait a year and make some adjustments to maximize value. They should take a long view, if that is the best course of action for the seller.

6. Understanding the big picture. The Business Broker will usually not be a CPA or lawyer, but they will understand how to work with these professionals on your team. Because they are very experienced in “Deal Making” they should be able to offer solid input from experience to the other members of your deal team. They are also the only professionals in a transaction who can speak with all parties. They can talk to the buyer’s lawyer or the buyer. A lawyer, once a buyer is represented, can usually only talk to the buyers’ lawyer. A good Business Intermediary can talk to all parties and greatly aid in communication and keeping a deal together. They become in essence, the team Quarterback.

In Conclusion, when choosing a Business Broker/ Intermediary choose someone with experience and who you get along well with. A business owner needs to be painfully honest with the Business Broker and be comfortable doing so. A Business Broker / Business Intermediary will most often better prepare the business for sale, Better prepare the marketing package, better maintain confidentiality, obtain a higher price and create an increase chance of a smooth closing.

If you would like a confidential and no cost consultation with an ROI Business Intermediary, please reach out to me at grayberg@roibusinessbrokers.com

About Gary Rayberg

Gary has started, managed and sold seven successful service companies. He brokered his first business in 1983 as a result of being asked to help sell a firm he had once owned and sold to a buyer who wanted to move on again. The buyer in that first brokered sale was none other than Rico Petrocelli, formally of the Boston Red Sox. Gary went on to start and run service companies in the fields of commercial landscaping, janitorial services, office coffee service, moving and storage, telemarketing and corporate employee relocation. Each company was sold once goals were reached. Gary was also one of the initial stockholders in the agent buyout of Bekins Van Lines, a national moving and storage firm. Licensed in real estate since 1984, Gary has been involved in the negotiation for sale of businesses and/or real estate in over 30 states and several foreign countries. He was President of the New England Business Brokers Association in 2012 and 2013, a founder and current Chairman of the Board of the area’s only business MLS type system, the Business Brokers Alliance of New England. He is past president of his local Rotary Club and currently sits on several other boards. He is a member of the Institute of Business Appraisers and the IBBA (International Business Brokers Association) where he has earned the CBI (Certified Business Intermediary) designation. Gary also holds the credential of M&AMI (Mergers and Acquisitions Master Intermediary) from M&A Source of Atlanta, the world’s largest international organization of experienced, dedicated merger and acquisition intermediaries representing the middle market. He is one of less than 200 M&A professionals in the world to hold the M&AMI designation which is awarded based on education, completed M&A transactions, and peer review. Gary believes “education is the cornerstone of ROI’s competitive edge.”

Gary and his wife Lisa have three children and currently split their time between Boston’s south shore and the lakes region of NH.

ROI has offices in MA, NH and GA to serve the entire east coast out to the Mississippi and beyond. ROI offers business brokerage services for companies with up to $50,000,000 in annual revenues. We run an exclusive, no asking price process that helps the market deliver the highest value possible to a business seller.

In addition to third party sales ROI also assists in ownership transfers to key employees, family members or other known buyers. ROIs valuation/consulting services and “Value Maker” program can help prepare a business for sale at maximum value.