Do you own a limousine, trucking, bus, or ambulance business that you consider your most valuable asset? Are you considering selling that transportation company? If so, you may be considering utilizing the assistance of a business broker.
Many people make the mistake of hiring a general business broker that is local or even recommended by a friend. However, most general business brokers do not have the specific industry experience and calculations to properly value and list your transportation business. Before you hire a business broker ask them these four imperative questions.
“What is your previous experience with selling a business similar to mine?”
While many general business brokers do have talent and experience in a sales process, they often overestimate their ability to sell a business specific to an industry. Their lack of experience in the actual transportation industry may lead them to value your business incorrectly.
You want to pick a industry specific business broker that can use years of experience owning, buying, and selling transportation businesses to create an industry specific valuation formula. Sellers often list with a general business broker only to receive no offers. The business broker may eventually turn to a transportation business broker for assistance.
Ask questions and a lot of them. Find out how many transportation business sales they have successfully completed? Learn about any problems or complications that may have occurred and how they handled them. Rather than listing your business for a year or more, choose an industry specific broker that can get the deal done in three to nine months.
“Do you require a commitment or launch fee?”
It is a proven fact: sellers who list with industry specific brokers over non-industry specific get quicker results and possibly more money. Some business brokers do not require a commitment fee, which may in turn allow them to stockpile listings. However, they run into issues when sellers/buyers are not serious.
An industry specific broker may require a commitment fee to secure his services. First off, the broker will determine if the seller fits their specific requirements.
Is the seller properly motivated to sell? Does the seller understand all of the fees and willingly agrees to follow the broker’s plan?
If this seller fits this criteria, then they are able to pay a commitment fee to secure the broker’s time, talent, and wealth of experience.
“When you say you have buyers, are they qualified?”
Some business brokers may advertise that they have possible buyers lined up. However, are the buyers screened and qualified to purchase a business like yours?
Most business sales are hindered when a buyer suddenly backs out of the deal. If this does happen, how will the business broker produce more possible buyers?
Examine the broker’s lead system. Are they constantly generating new buyers? Do not get stuck listing your business for months or even over a year with the hopes of finding that one perfect buyer. Be sure to choose a broker that has qualified buyers lined up and is ready to produce more if that time comes.
“Are you continuing your education and professional training?”
You want to be sure that your business broker is up to date in all of the latest strategies, techniques, laws, and skills. If you are selling a transportation business, choose an industry specific broker that is a member of the IBBA (International Business Brokers Association) and the TABB (Texas Association of Business Brokers). A member of these associations will attend continued education and training seminars to ensure they are current with the industry’s needs.
If you are preparing to sell the most valuable asset you have ever owned, be sure to choose an industry specific business broker that has the experience and knowledge to quickly get you a sale. General business brokers may have experience in the sales process, but most likely lack industry specific knowledge that is crucial to ensure you get the best price for your business.
Gary Kane says
Thank you. Great Post.
I would add that a generalist business broker is a specialist in a community or metro area. An industry specialist would not have enough volume for deals to specialize in a community or metro area.
developing relationships | brokering businesses