Properly Vetting Your Business Broker | Interview Questions to Ask
A guided list of specific interview questions to ask during your first meeting with a broker. When interviewing a potential business broker, your goal is to determine if they have the specific expertise, buyer network, and professional processes necessary to sell a business of your size and industry. For those looking to sell, vetting your Business Broker is essential for ensuring the best outcome.
Performance & Experience
How many businesses in my specific industry have you sold in the last 3 years? Why it matters: Industry-specific knowledge ensures they understand your valuation multiples and the unique regulatory hurdles of your sector. When it comes to performance history, never overlook the process of thoroughly vetting your Business Broker.
What was the average difference between the initial asking price and the final sale price for your last three deals? Why it matters: This reveals if the broker is realistic about valuations or if they “buy listings” by promising an unattainable price just to sign you.
How long did it take to close your last three transactions from the date of listing? Why it matters: The median time for a sale is typically 6 to 9 months. Extreme outliers in either direction can be a red flag; careful vetting of your Business Broker will help avoid unexpected delays.
Marketing & Buyer Vetting
Can you walk me through your specific buyer vetting process? What to listen for: They should require a signed Non-Disclosure Agreement (NDA) and Proof of Funds before revealing your business’s name or sensitive financials. In marketing, a key step is vetting your Business Broker to ensure they attract reliable buyers.
How do you proactively find buyers beyond just posting on listing sites like BizBuySell? What to listen for: A top broker should have an existing “queue” of qualified buyers and a plan for targeted outreach to strategic competitors or private equity firms.
Who exactly will be my day-to-day point of contact? Why it matters: In larger firms, you may be signed by a senior partner but passed off to an inexperienced junior associate for the actual work. Moreover, part of vetting your Business Broker is clarifying communication expectations.
Valuation & Process
What specific valuation methods will you use for my business? What to listen for: They should mention SDE (Seller’s Discretionary Earnings) or EBITDA multiples and explain how they “normalize” your financials by adding back one-time expenses or owner perks. When discussing valuation, you should pay close attention to business Broker vetting criteria.
Will you attend all meetings between me and potential buyers? Why it matters: You are paying for their negotiation expertise; they should be present to manage the conversation and prevent you from accidentally disclosing sensitive info too early. Assessing this is a core part of vetting your Business Broker.
Do you ‘co-broke’ with other firms, or do you only sell to buyers in your own database? Tip: Avoid brokers who refuse to co-broke, as they are limiting your buyer pool to keep the entire commission for themselves. At Neri Capital, our business brokers do not limit themselves, or the buyer pool.
Can I have references of past clients? Confidentiality agreements may apply, but the broker may have a few select clients who have given them permission to be used as references. Vetting your Business Broker involves checking references to confirm their reputation.
Interested in discussing your sale further? We have a long track record of success brokering business sales in a variety of diverse industries. Before you start, remember that properly vetting your Business Broker can make the process smoother and safer for you.
Contact us to hear more about our accomplishments and strategy for getting entrepreneurs top dollar for their life’s work.
Written by Tim Uzar, Business Broker with Neri Capital Partners.