How to Choose the Right Business Broker in Pennsylvania

For most entrepreneurs and business owners in Pennsylvania, the reward for successfully growing a business to profitability is being able to sell it for a decent price. However, finding a good business broker in Pennsylvania who will represent your best interests and locate a worthwhile buyer can be a challenge. For the business owner in Pennsylvania looking for a business broker to help sell your business, here is how to choose the right PA business broker.

Compile a List of Options

The first thing you need is a list of potential business brokers. The most reliable way to make a list is to ask for referrals. This is because people talk about good professionals that they have worked with and gladly recommend them. Speak with fellow business owners, accountants, business developers, financial planners, estate attorneys and other professionals who might have related knowledge and find out if they can recommend a quality business broker in PA. You can start your list with these recommendations and then search the internet for reputable business brokers to include as well.

Conduct Due Diligence

Once you have compiled a list of potential business brokers, you will need to sift through to choose the candidates you will speak with. The first screen should be educational and can be done on the web. Do they have an informative web site including their principals and their background? Have they successfully brokered the sale of multiple businesses? These are necessary preliminary questions that can help separate the wheat from the chaff.

As you do your research, the things you learn about the potential brokers will let you know who to call for talks. Make sure you verify their certifications and investigate their reputation. How long have they been practicing? Are they certified by key organizations in mergers and acquisitions advisory and business brokerage, or just real estate brokerage? Are they experienced with issues around finances and taxation? Do they have a reputation for being honest advisors or do the people who have worked with or for them in the past speak negatively of them? By conducting due diligence properly, you can identify which business brokers to move the conversation forward with.

Ask Important Questions

When you finally go into conversation with your potential brokers, ask questions that will reveal how competent and capable they are of handling the sale of your business properly. Do they have a plan for valuing your business and can you be shown valuation samples? Is the valuation being performed by an independent, accredited, third party valuation firm? How will they find buyers and do they have a good marketing plan? Can the broker attract international buyers? Will the marketing plan include confidentiality? How will potential business buyers be qualified and is there a written process for this?

Take Fees into Account

It is common practice for a Pennsylvania business broker to request up to 10%-15% of the gross value of the business sale in fees. These numbers, however, are negotiable and also depend on the actual value of the business in question. Some business brokers may try to charge as high as 20% but those brokers are unreasonable and should be avoided. You should also refuse to work with any business broker who requests a large advance / retainer fee.

Building a successful business is a difficult task and deserves to be adequately rewarded. If you wish to claim your reward, put the steps in this guide into practice so you will be able to choose the right business broker in Pennsylvania.