Choosing The Best Business Broker

<p>Buying a business today is an involved and complicated process requiring expertise in many different areas (i.e., legal, accounting, tax, business valuation and due diligence). With thousands of businesses available navigating your way to the right one can be an arduous task.</p>

<p>A <a href="http://www.qbsnet.com">Business Broker</a> can be a very effective tool to identify, locate, screen and value each targeted business and thereafter, in obtaining financing, negotiating the purchase, coordinating the due diligence and supervising the preparation of all transaction documents through the closing.</p>

<p>In the event you as the buyer attempt to purchase a business without the aid of a broker, realize that the listing broker represents the seller who pays his or her commission.  Since most listing brokers will ordinarily not do anything to jeopardize a sale, you cannot rely on the seller's broker to advise you objectively.  Never lose sight of that fact!</p>

<p>For most published listings, the listing broker will "cooperate" and "share" the listing, and the commission, with the broker hired by the buyer.  In this case, it will not cost the buyer any fees or commissions to obtain exclusive representation. </p>

<p>Once you decide to hire a business broker, seek out a <a href="http://www.qbsnet.com">competent professional</a>.  The vast majority are unprofessional and quite dysfunctional when it comes to understanding the transaction, valuing the business and providing customer service and support. Furthermore, most business brokers have never owned or even purchased a business or professionally represented or counseled business owners.  In California, one need only become a licensed real estate broker to sell business opportunities.</p>

<p>At a minimum, a qualified business broker can greatly facilitate find the right business, especially if the broker is well acquainted with your purchase criteria. Although there are many <a href="http://www.qbsnet.com/buying-a-business.php">business listing services</a>, some brokerage firms have software programs that can consider your purchase criteria, investment amount, owner benefits and other factors and produce a more focused and narrow search (see: http://www.qbsnet.com/buying-a-business.php).  This can be extremely important.  As you will soon find out, unlike purchasing real estate, evaluating a business is a very time consuming process. Therefore, it is important to apply your resources effectively.</p>

<p>So how do you go about finding a good business broker? Our <a href="http://www.qbsnet.com">Quantum Business Solutions Network</a> professionals have listed a few essential ingredients in your search for a competent business broker (for a description of the full range of business broker services offered to <a href="http://www.qbsnet.com">California business buyers and sellers</a>, please visit http://www.Qbsnet.com).</p>

<strong>Before you sign an Agreement</strong>
<p><strong>Broker’s profile</strong><br />

The best brokers are affiliated with accredited Associations relevant to their state and profession. For example, in the state of California, the best business brokers are registered with the California Association of Business Brokers (http://www.cabb.org) and the International Business Brokers Association  (http://www.Ibba.org).</p>

<p>Make sure the <a href="http://www.qbsnet.com">California business broker</a> is qualified to provide competent representation. The firm or the individual should have their own website which is regularly updated with news, articles and business listings. Excellent contact details, company profile as well as having well qualified  professional such as accountants, attorneys, etc.</p>

<p><strong>Expectations</strong><br />
The business broker should clearly attempt to understand your exact purchase criteria, investment objectives, background and experience.  This will ensure that the broker is not wasting your time and missing viable business opportunities in the marketplace (a good business brokerage firm will maintain its own network of listings, many of which are not “published” and unavailable to the general public).  In addition, a competent business broker will continually narrow the focus of the search based upon your constant feedback. There should be a mechanism in place to accomplish this task.  Quantum Business Solution Network employs uniquely designed business buyer software which constantly narrows the search and identification process.</p>

<p><strong>Communication</strong><br />
Take some time before committing to a particular business broker and see how responsive he or she is at the outset.  Attempt to inquire about the nature and scope of the services offered.  Determine if they respond in a timely and comprehensive manner. </p>

<p>The best business brokers are excellent communicators and always respond in a timely manner (in business purchase and sale transactions time kills deals) and often serve an indispensible element toward ensuring the flow of the transaction toward a smooth closing.</p>

<p>The listing agreement/contract should include: <br />
<ul>
<li>length of time they will be representing you (6-12 months is typical) </li>
<li>the type of the agency relationship offered by the broker (you want the broker to serve as your “exclusive” agent)</li>
<li>the manner and payment of the broker’s compensation</li>
<li>the nature and scope of the brokers duties</li></ul>
</p>

<p><strong>About the Author</strong><br>
<a href="http://www.qbsnet.com">Quantum Business Solutions Network</a> is a full service <a href="http://www.qbsnet.com">Southern California business consulting</a> and <a href="http://www.qbsnet.com">licensed brokerage firm</a>. Quantum Business Solutions Network is comprised of professionals that combine valuation, financial, marketing, legal, accounting, tax and transactional structuring expertise to initiate, execute and consummate business acquisition and divestiture transactions.</p>

<p><strong>Copyright</strong><br>
&copy; Copyright 2007, Quantum Business Solutions Network. All rights reserved. <br>
This Article is Copyright protected. Republishing & syndication of this article is granted only with the due credit, as mentioned, retained in the republished article. Permission to reprint or republish does not waive any copyright. The text, hyperlinks embedded on the article and headers should remain unaltered. This article must not be used in unsolicited mail.</p>

Broken Woes of the Business Broker

Business brokers don’t have it easy. It seems as though many brokers have their stories of how they have dealt with unhappy clients trying to cut out of the deal after escrow is closed. Some business brokers can tell their woes of how they were shorted on their commission, and many will claim that miscalculations are all too common.

Informing the Buyer

Anyone looking to sell their business needs to have as many interested buyers interested as possible; getting the word out is the most important thing to do in the beginning. That way you always have back up buyers if anyone drops out. And as always, the more information you can provide about the business for sale, the more chances you have on it being sold. The less information you provide in your advertisement, the less quality you are presenting to the potential buyer.

Basically the best thing to do is to provide all the information there for the potential buyer. Holding back because it will attract people to inquire more is a big mistake.

Miscalculation

Miscalculating the amount of home equity can be absolutely detrimental to the loan process. The equity is necessary mostly because the lender needs at least some home equity to secure the deal. But it’s necessary to also check out where home prices have dropped because there could be many more homes for sale in the same area because of this. Checking the rates of other homes in the area and comparing helps a great deal in the decision process. If it’s absolutely necessary to use equity to secure financing, you must compare prices no more than six months old.

Financing

Majority of people looking to buy a business are going to finance. Many try to avoid Small Business Administration loans because of how long they take to be processed. It’s very important for business owners and sellers to be involved in the financing process from the very beginning so that there are no surprises around the corner.

Certification

Business broker certification means that you are registered with a government agency. There are several levels of certification, and different types might be required in specific situations. Potential buyers have the ability to investigate the certification of brokers as well. A large brokerage could be certified in general, without the broker checking the certification of the transaction themselves.

When people find a broker who has taken it upon themselves to be certified this is seen as more valuable to the buyer. This is assurance of the broker’s capabilities, and with such large competition out there, can be essential to the broker’s business.

The broker might even be required to demonstrate through a different form of certification that the work was done in the buyer’s best interest, without bringing success solely to the broker throughout the transaction. That being said it’s important to realize that it’s possible to choose a broker who is certified to the buyer’s level of satisfaction, even before the process has begun.