This one seems so obvious. Why don’t business owners do it?
Selecting the right advisor is critical because it is going to be someone that you will be trusting and relying on very heavily.
Why wouldn’t you want to learn from other business owner’s experiences good and bad?
We recommend that you request at least five references. Preferably in your business sector or similar sector. Then check all five of them.
Everyone has a couple that will typically say anything they want on the broker’s behalf. It is a lot harder to cover five.
Ask questions that require answers such as:
- How long did your transaction take to close?
- How many buyers were engaged by your broker?
- What percentage of your desired purchase price did you achieve?
- Was your broker knowledgeable about your company?
- Did your broker command respect from the buying team?
- How timely was your broker?
- How thorough was your broker?
- What were your broker’s data management techniques?
- Did your broker hold firm on the sales price or allow retrading?
- Would you use this broker if you had it to do over again?
Record their responses and compare all five. Also, compare to the information that your broker shared with you during their introductory conversations.
You will never regret doing a thorough job evaluating references.
You could definitely regret conducting an incomplete or ineffective referral check.