Steer your clients to business brokers who work for their money
16th Sep 2020
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Appointing a specialist to undertake a one-off assignment can present a conundrum for many accountants and their clients. Searching for a business to purchase is one of those moments.
On the one hand you need to engage somebody, but how do you know whether they can be trusted to deliver the goods?
When it comes to dealing with business brokers the industry suffers from a poor image. Once the initial smiles and bonhomie is out of the way clients often find themselves high and dry, feeling stranded and impotent while the clock ticks and the weeks and months pass with no results.
Clients are asked for up-front fees but are not quite always sure of what to expect, in spite of a letter of engagement or a contract in place.
A broker needs to be paid something for taking on the brief as there is a lot of work that is front-loaded, but you need to ensure that they are not simply trawling websites for opportunities that are publicly available.
Off market opportunities via growth consultants, accountants and industry contacts is where your agent needs to be looking, not trawling websites. Ask them what they will do for your client and make sure you will get meaningful reports on a regular basis to keep them on their toes.
Contacting owners directly brings results, but it’s hard work - every business is potentially for sale, even if there is no sign on the door.
Brokers coming up against other brokers means you are playing poker with brokers on the other side, potentially having to bid against other buyers.
As a final thought: remember that you need to be looking at a bunch of opportunities to know which are good ones - if you are only looking at one you have nothing to compare against.
A competent broker will get you talking to multiple potential sellers, so you have the pick of the crop.