Florida business owners have a number of choices when considering selling their businesses. Locally, you will find representatives from large national firms as well as a number of independent providers working in specific sub markets like Tampa, St. Petersburg, etc. Choosing the right business broker for your particular business is critically important – it can mean the difference between a smooth transition or a lasting headache.
After all the time and effort you have spent building your company you cannot afford to entrust its sale in the hands of someone who will not absolutely maximize the value of what you have built.
The process of choosing a business broker is a lot like hiring an employee, you need to interview and carefully vet the person and organization that you hire to run the sale process for you. Below are a few tips that we hope help you choose the best Florida business broker for your business:
- Industry – You don’t necessarily have to hire a business broker that is an industry specialist, but the person you hire should be comfortable in the space your business operates in. Historical performance is a great benchmark for industry savvy. Ask them what types of companies they have sold recently. Quiz them with industry-related questions (like value drivers etc.). Ask them if they know the multiples that businesses in your segment typically trade at.
- Geography – You need to hire a business broker that understands the region your business is in. We cannot stress this enough – each market is different. Buyers, sellers, funding sources and even laws vary state to state. You should give preference to a team that is heavily vested in the local Florida business community. For example, if your business is located in Tampa, Florida you need to hire a business broker that understands the complexities of the Tampa market. If there is real estate involved in the transaction they need to understand the real estate climate in Tampa.
- References – When interviewing business brokers to sell your company ask them for references that you can speak to. If they have never sold a company before or can’t produce a number of quality references chances are they not the right business broker for you. Additionally, give preference to business broker firms who have local client references. The broker can easily claim they have serviced companies outside of your area, but when pressed to share local feedback they may have little to show.
- Sale strategy – Ask your potential business broker how they plan to market your company for sale. Are they going to develop a prospect list of strategic and private equity buyers or are they simply going to post an advertisement online describing your company and the transaction sought? The mix of buyers in the region will dictate how they proceed with the sales process. A quality business broker in Florida should have the capability to develop a full Confidential Information Memorandum describing the operations and financial performance of your company.
- Transaction expertise – You need to ascertain if the business broker you are interviewing will advocate for you in an intelligent way. Can they guide you through the due diligence process all the way to close? Do they have the support network of accountants and attorneys to make sure the transaction goes as favorably as possible? Give preference to firms with a local network at least within the state of Florida if not your local community.
- Trust – What is your gut feeling about the person representing the firm? Do they feel like someone you can trust to manage the largest and most meaningful transaction of your life? If so, they are more than likely person. If not, don’t force it – when in doubt, go with your gut.