It’s highly recommended that you enlist the aid of a business broker during the buying process. Keep in mind that a broker generally represents the seller in these transactions, even if you’ve effectively “hired” them. The two most effective manners in which a broker can be of assistance to a prospective business buyer is to provide you with access to businesses for sale that you may not find on your own and to deliver bad news to the seller.
Business brokers are besieged with buyers; the market is flooded with them.
In order for you to get a broker to return your calls, show you businesses and dedicate time to you, you will need to demonstrate to them that you are serious about buying. Nine out of ten “buyers” whom they encounter, never buy a business. Show them that you’re committed to this process. How? First, educate yourself about the business buying process. Read the necessary materials to learn what it takes to buy the right business.
Next, prepare a personal listing of the type(s) of business(es) that you’re looking for, how much you are prepared to invest, what your time frame is, your background, credit history, etc. The more you tell them about yourself and what you’re looking for, the greater their ability to help you. Business brokers are not fortunetellers. They need you to steer them towards the businesses that make sense for you.
As it relates to their input, their role should be to act as a liaison to the seller for you. You’ll have to work with a seller for training after the purchase so if there’s any bad news to deliver to the seller during the negotiations; let the broker do the dirty work.
Broker roles vary widely depending upon location.
Many areas have a multiple listing of businesses for sale, while others do not. Where an MLS is in place, you can use one or a limited number of business brokers to identify businesses that are “on the market”. If there is no such service within your region, then you’ll more than likely need to utilize multiple brokers since they may have a tendency to only show you listings that they have or are part of their office.
It is recommended that you contact the regional business broker association in your state or country. Ask them how brokers work within that region and whether or not they share listings.
Remember:
A business broker can help you but they cannot do your work.
This is your money, your future and your potential business. Don’t shift the responsibility for your success to any third parties. Use a broker to help you but help them out by making certain that you are well prepared, educated and highly committed to this process