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Business For Sale Articles

Rob Lenhard 4.30.2013

Choosing a Business Broker

When a business owner contemplates the sale of a business, choosing the right business broker with whom to work will become critical. Capriciously choosing your sales representative might be fraught with problems. A poor choice might even prove to be a disastrous, unnerving experience. A wise selection will enhance your wealth when exiting your business.

The associates at Hallmark Business Consultants believe one of many reasons for a successful sale of a business begins with choosing a business broker carefully. The business owner might wonder “how do I know what I should do?”

Over many years of having worked with a number of business sellers, business buyers, and business brokers, we have systematically developed some recommendations for the business owner to consider.


Here are some points for the business owner to consider.
  • Without reservation business brokers should be willing to include the business owner’s CPA and attorney on a team of professional advisors.
  • The business broker’s willingness to provide references with whom a business owner may confer is absolutely necessary.
  • Lawsuits have plagued more than one business broker. Checking the Pima County Superior Court website will disclose previous legal difficulties and challenges.
  • Disciplinary action by the Arizona Department of Real Estate against a brokerage firm or any of the firm’s agents should be investigated.
  • Valuations are necessary to ascertain business values. Knowledgeable business brokers should be able to show a sample of a previous valuation project.
  • A skilled business broker should be able to prepare an attractive, comprehensive, marketing package of an owner’s business. Ask to see samples of previously prepared packages.
  • Membership in the Arizona Association of Business Brokers, International Business Brokers Association, the M & A Source, and the Tucson Metropolitan Chamber of Commerce is important. These kinds of organizations have codes of ethics, encourage furthering continuing, professional education as well as foster one’s commitment to community involvement.

In addition to the points enumerated above, there is one matter that is paramount for a business owner to consider when interviewing business brokers in person. There is reluctance and sometimes outright unwillingness to share information about a seller’s business with other business brokers.

If your broker will not share information with his/her peer group, you will not get the maximum exposure you expect. The Commissioner of Arizona Department of Real Estate is the regulatory authority for business brokers. The Commissioner specifically requires that a broker disclose to a client that he/she will not work with one or more particular competitors.

Invariably, that uncooperative broker may suggest that another broker may not appreciate the importance of confidentiality as much as he/she. This is a specious argument since all members of the above-mentioned associations subscribe to codes of ethics that require confidentiality.

Before entering into any agreement to list your business for sale, perform your own due diligence. By doing so you will save yourself a lot of frustration and aggravation as you journey down the road with the party you want to sell your business.