If you’re looking to buy or sell a business, hiring the right business broker is one of the most important decisions you’ll make. The broker you choose will guide you through every stage of the process, from valuation and listing to marketing, negotiations and closing. Picking the wrong broker can derail a deal and cost you time and money. 

That’s why interviewing and vetting several brokers is absolutely essential. You need to ask the right questions to assess their skills, experience and fit for your particular business. This post will cover the 15 most critical questions to ask when interviewing potential brokers. Thoroughly vetting candidates will help you find the best broker to represent your interests in what will likely be one of the biggest transactions of your career.

What experience do you have in my industry and with businesses of my size?

An experienced broker who understands your industry intricacies and has bought/sold comparably sized companies before is crucial. You don’t want to be a broker’s first client in your niche or size bracket. Ask specifically how many deals they’ve closed in your sector and what the average sale price/valuation was. Look for at least 10-20 similar deals to feel comfortable they can accurately value and market your business.

How long have you been a business broker? How many total deals have you closed?

In addition to industry-specific experience, the broker’s overall deal experience matters. Novice brokers may fumble negotiations or make pricing mistakes that cost you. Ask how long they’ve been brokering deals and the total number they’ve closed. Ideally, you want to see 10+ years brokering experience and at least 50-100 closed transactions. Don’t hesitate to verify these numbers.

What is your process for selling a business? What marketing strategies will you use?

A broker should have a detailed process for preparing a business for sale, listing it, marketing it to qualified buyers and negotiating offers. Ask them to walk you through the typical steps so you understand what’s involved at each point. Also ask how they plan to market and advertise your listing to generate buyer interest. Print ads? Email campaigns? Trade show booths? Their strategy should capitalize on your business’ strengths and target the right buyer profiles.

How will you determine an appropriate asking price for my business?

Pricing a business is tricky – price it too high and buyers lose interest, but price it too low and you leave money on the table. Experienced brokers rely on accurate valuation models to set an optimal price. Ask what specific valuation methods they use so you understand how they’ll reach the listing price. Also ask for 3-5 case studies demonstrating how they’ve priced and sold similar businesses (while keeping confidential details private).

Do you have a list of qualified buyers ready to make offers? How do you plan to find potential buyers?  

Your broker should already have a rolodex of qualified buyers to share your listing with immediately. If not, they need a solid plan to find buyers that fit your business’ profile. Ask how they source buyers, like through trade ads, events, referrals, investor databases, etc. Also, clarify if they’ll seek out both strategic and financial buyers to potentially widen the buyer pool.

Will you act as the intermediary in negotiations? How will you represent my interests?

Brokers should serve as a buffer between you and prospective buyers during offer negotiations. Make sure to ask how they’ll represent you in these discussions. A broker who pushes too hard may sour the buyer, but one who makes excessive concessions could cost you money. Look for balanced negotiation strategies that get you the best deal without sacrificing the relationship.

How accessible will you be throughout the sale process? How often will we communicate?  

Lack of communication during a deal can cause major headaches. Clarify upfront how accessible and responsive the broker will be. Will they provide weekly status updates? Be available nights/weekends? Set expectations on response time for calls/emails so you aren’t waiting in limbo on time-sensitive issues. Also discuss the best methods and frequency for communication that work for both of you.

What is your fee structure? What other costs might I incur?

On the financial side, brokers typically charge 5-15% success fees based on the final sale price. Get fee quotes from multiple brokers and clarify what’s included versus what you may pay separately (like marketing fees). Also confirm how the fee is collected – such as at closing. Be wary of brokers who ask for large upfront retainer fees before officially listing your business.

Can you provide 3-5 references from past clients? 

Reputable brokers should have no issues providing references you can call to ask about their experience. Talking to a broker’s past clients provides unfiltered insights into their skills, integrity and results. Ask clients if they’d use the broker again, what they’re great at versus weaknesses, and if the deal outcome matched expectations.

Are you a certified/licensed broker? Do you carry errors and omissions insurance?

Most states require licensing for business brokers. Verify the broker has the proper credentials in your state to legally transact deals. Also, make sure the broker carries errors and omissions insurance to protect you from potential liability issues. An uninsured broker is risky.

How long will the selling process take? How quickly can you get my business to market?

Selling a business typically takes 6-12 months but can vary greatly based on factors like industry cycles. Ask the broker how soon they can get your listing to market and their estimate on transaction timeframes. Also clarify what delays could occur like due diligence, financing contingencies, etc. Have them walk you through recent deals to demonstrate time-to-close track records.

What’s your track record with deals falling through? How can you ensure this won’t happen?

An astute broker will identify red flags with buyers early and mitigate issues that could tank deals, ensuring you close successfully. Discuss why deals fall through, like financing problems ordiscovery of undisclosed problems. Then explain steps they take to avoid this, like vetting buyer financing early or encouraging sellers to allow due diligence. Ask for 3-5 examples where they’ve rescued deals on the brink of collapse.

Do you have established relationships with key advisors like lawyers and accountants? 

Selling a business requires input from professionals like lawyers, accountants and appraisers. Ask if your broker already has trusted advisors they work with regularly that can provide referrals. If not, clarify how they’ll go about building an advisory team well-versed in your niche and deal specifics. Rapport with top specialists ensures you get the best counsel.

How will you ensure there are no pending lawsuits or liabilities transferred to the new owner?

Lawsuits, liens, compliance issues and hidden liabilities can torpedo deals fast, so brokers must thoroughly vet for dealbreakers. Discuss their process for checking for issues that could unexpectedly kill deals. Also explain how they ensure any such liabilities don’t transfer to the buyer upon sale, which protects your interests after the transaction.

What post-close support will you provide? What if issues arise down the road?

Problems with transactions can surface months after a deal closes. A diligent broker remains available to resolve issues that pop up post-close. Ask if they offer continued support once the deal is done and what that entails. Also clarify what assistance they provide if legal, financial or operational issues arise later related to the sale.

Conclusion

Finding the right business broker for an ownership transfer is crucial but challenging. Asking the right questions during interviews helps you thoroughly vet candidate brokers on everything from experience to negotiations skills, deal protections and post-close support. While the process takes time, having an expert broker you trust by your side provides immense value. They’ll help you maximize your sale outcome and avoid costly pitfalls in one of the most important transactions of your life. Use the 15 key questions provided above as a starter checklist to narrow your broker search to find the ideal advisor for your upcoming deal.