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Business brokerage is like any other business. There are good brokers and bad brokers. So if you are selling a business how do you tell which is a “good” one?

One way to tell is to ask the broker if they cooperate with other brokers – commonly called co-broke. This is essentially the same as it is in residential home sales where one broker lists the home but another broker might bring the buyer to the transaction.

In my opinion the only valid reason why a broker will not co-operate with another professional broker is pure greed. In other words, they want 100% of the commission for themselves even if it means the seller loses out on a sale or getting the best price for his/her business.

A broker’s responsibility to the owner of a business is to help get the best price for the business. That goal is obviously accomplished by exposing the business to the greatest number of potential buyers. It also helps get the best price for the buyer by often bringing multiple offers to the table which creates a semi-auction situation.

I ran into this situation just a few days ago. A broker, actually a broker who is from out of state and has no presence in the state where the business is located, advertised a business for sale in a neighboring state.

I contacted the broker to find out if the business was still available for sale and if they would co-broke the listing.

The immediate answer was “no” we don’t co-broke. Not even with a professional and experienced business broker representing the Buyer. I asked him, “don’t you feel a fiduciary responsibility to your seller to bring him the best possible value for his/her business instead of worrying about what your commission would be?” A long pause followed.

Of course, the shame of it is that the owner of the business i’m sure had no idea that the broker was turning away a potential sale because the broker was unwilling to split a commission with another experienced broker that could bring a buyer to the deal.

Which leads us to tip #1: When selecting a business broker be sure to ask the broker if he/she will co-broke with other brokers. If the answer is no, say no to the greedy broker and find a broker that has your best interests at heart.

To see how Steve Ferber can help you sell your business honestly and fairly, contact Steve at 602-312-6808 or steve@steveferber.com

For more information on this new opportunity please contact Steve Ferber PC at steve@thewheatleygroup.com or call 480-477-6305.

If you a thinking about buying a franchise you must read this article and the links below. There is no more important piece of information that can help you compare franchise opportunities then the SBA’s elusive list of franchise default rates.

Let me explain. If you knew that seven out of ten  people who bought a franchise from a particular franchisor that you were considering, defaulted on their SBA bank loan would you reconsider? Conversely, if only one out of thirty people who bought a franchise from a particular franchisor defaulted on their SBA loan would you feel better about your chances? Of course you would.

Well, that information is available online and the results may shock you. Many well known franchise brands regularly show that more than 50% of the franchises they sold to franchisees defaulted on their SBA loans- and probably went out of business.

Does that mean that every franchisee that bought one of those poor performing franchises failed? No, but it shows a trend and raised a red flag that needs to be thoroughly investigated by any potential buyer.

My advice to a anyone considering buying a new or resale franchise offering? Check out these default rate lists below or several others that you can google online.  Then consider playing the odds. It’s your hard earn money. If it were mine, I’d play the odds and go for the franchises with the lowest default rates and instead focus on those with the best odds.

http://fitsmallbusiness.com/best-franchises-sba-default-rates/

http://www.unhappyfranchisee.com/worst-franchises-in-america/

The decision to hire a merger & acquisition adviser requires interviewing advisers and brokers the same way you would approach the hiring of a new employee.You need to ask the right questions upfront.

But one question that business owners must ask is one that will surprise you. Not because its an odd question, but rather that most business owners would assume it need not even be asked.

In the last few weeks I have represented a Buyer that was interested in two different businesses that we visited – one  in person and one via a conference call. In both instances the business owner was represented by an invisible broker.

Both times the business owner was left to fend for himself. In other words the owner’s broker never showed up.  In one instance the owner’s broker simply said to the client – “Let me know how it goes”.

In all the years I’ve been representing sellers or buyers I’ve been at every single showing of a business – whether I represent a Buyer or a Seller.On those very rare occasions when i had an emergency or I was out of town, my colleague at The Wheatley Group was there.

Put simply, I believe that being there for a client is one of the key responsibilities of a broker.They are there to protect your interests.They cannot do that sitting at home in front of their TV.

When you hire a merger & acquisition or business broker firm you should ask right up front if the broker will be at EVERY meeting. If the answer is no then you’ve got the wrong broker.