Buying a Business with a Broker

Buying a business without a broker is no problem if you know the business owner, or already have a good idea of the type of business you want to buy. If you're starting from scratch, however, and have no knowledge or experience in your prospective industry, a business broker can help you get down to specifics.

He or she can help you make informed decisions about what type of business you need to buy, how much money you should spend, and most importantly, which business is right for you. Brokers can ensure a smooth transaction from an initial appraisal through the negotiating process to the final close of the deal, ensuring that you find out what you need to know in the due diligence process.

Because brokers usually earn their commissions from the seller, it's always a good idea to browse a broker's listings. They can give you a good idea of what's available in your geographical area or prospective industry.

Business brokers often specialize solely in the sale of small businesses. Some brokers even specialize in the sale of specific types of businesses, such as travel agencies or restaurants. These specialized brokers have usually worked in their specific industry.

As a result, a good business broker should have hundreds of listings available at any given time. Be wary of brokers who deal with the sale of small businesses only on the side — they might not consider your interests as important as a broker who deals solely with buying and selling small businesses.

And remember to always ask potential brokers for references. They should be able to provide you with a list of former clients who can share their broker experiences.

For more information on business brokers, read How Much Do Business Brokers Charge?