Is It Time To Change Your Business Broker?

Owners can become disheartened when a sale takes longer than expected. A structured review of activity, buyer feedback and the engagement terms is more useful than assuming a change of broker will solve the problem.

Maybe your broker is doing a good job and it’s just taking longer than you hoped, perhaps you feel they have lost focus, energy or you just regret engaging them in the first place. We can also understand your reluctance to change too. You may have developed a relationship with your adviser and invested much time and effort into the project. That said, a fresh pair of eyes and a new marketing initiative could be just what is needed to get your sale back on track and achieve your goal of a successful exit. Changing or upgrading your business sale adviser could not only reinvigorate your exit ambitions, but also provide a much needed refocus in terms of research and finding new prospective buyers.

So here’s the question. How do you know when it’s time to change broker? Here are a few suggestions if you’re starting to feel like your business sale just isn’t meant to be:

Get Excited About The Process Again

When your business has been on the market for a while and you don’t feel like you’ve got as much interest as expected, it’s very easy to become jaded by the process.

There are many reasons why interest levels might be lower than anticipated. It’s crucial that you feel able to have open and honest conversations with your broker/deal leader. Fully understand the market and the processes being followed to generate new interest, do they remain actively marketing your business or have they just run out of ideas? Ask for a project review, this should give you an understanding of their ongoing plan and whether to stick with your current adviser; be prepared to cut your losses and try someone else, if you are not convinced – don’t continue to ‘flog a dead horse’.

A clear process should identify suitable acquirers and record follow-up activity. A new broker may offer a different approach, but cannot guarantee buyer interest or completion.

Know Who You’re Working With

Ask who is actually researching buyers and negotiating on your behalf. Firm size alone does not establish the quality or continuity of the service.

The individual deal leader’s experience is one factor in a sale, alongside buyer demand, valuation and preparation. Ask the following questions to assess the adviser handling your instruction:

– How long have they worked in M&A and at what level?

– How many completed deals have they personally acted on?

– What is their experience of successful sales or similar businesses?

– How many instructions do they manage at any given time?

– From their experience, how does the current valuation of the business fit with today’s market?

If the answers remain unsatisfactory after a documented review, consider alternatives. First check termination, notice and commission provisions, including fees linked to buyers already introduced.

Assess whether your adviser can explain the commercial rationale for likely buyers and present the business accurately. Compare the safeguards a sale-side adviser should provide, rather than assuming a particular background guarantees success.

Don’t Be Afraid To Start Over

Before starting again, ask whether changes to the existing instruction could address the problem. The ability to improve service depends on the people and agreed process, not simply the size of the firm.

The original 2022 article suggested a fresh approach for 2022/23. That historical suggestion is not a current completion forecast. Compare prospective replacements using these business broker selection checks; a different firm cannot promise a buyer or better terms.

Before appointing a replacement, obtain a written record of existing buyer introductions and clarify any continuing commission rights. Seek legal advice if the current agreement is unclear.