Why Business Brokers May Not List Your Business for Sale

Business brokers typically work very hard to attract business for sale listings. The business brokerage profession is quite demanding and brokers, accordingly, need to be somewhat discerning in the business listings they take on.

The following is an examination of some of the reasons why a business broker may not take you on as a client if you are looking to sell a business.

Price the business is to be listed at
A business broker will only take on a business listing if he or she thinks that they have a reasonable chance of selling it. If the price is too high and the broker feels that that the company is overpriced, they may not take you on as a client to sell the business.

Geographic location of the business for sale
Suppose you live in Niagara Falls, Ontario or Kitchener or Guelph then perhaps a Toronto business broker may not work with you simply for geographic reasons. It may be too far to travel to show the business to buyers or perhaps business brokers in Toronto might not be as familiar with other markets further out of the GTA.

Conversely, if you are thinking of selling a business in Toronto then working with a business broker that operates out of the GTA may be a wise choice.

Conflict of interest
Suppose you want to sell a manufacturing business and the business broker you would like to deal with has a relative or associate that is a direct competitor. This would be reasonable grounds for the broker to take on the listing.

No financial statements
Business brokers use financial statements to demonstrate a company's financial viability to potential buyers. If a business is a cash-only business or has very poor financial records then the business intermediary may decide that this venture may be too difficult to sell.

Unethical seller
Sometimes, a business owner may give the impression of being unethical or willing to push boundaries in their business dealings. A reputable business broker would most certainly stay away from dealing with such business people.

A business that is too small
Some micro-businesses are simply not cost-effective enough to justify engaging the services of a business broker. If you are thinking of selling a home-based business such as a small gift basket enterprise, then this is probably the type of business that a broker may not list.

Unrealistic time expectations
If a business owner expects to sell a business in a very short period of time, then a business broker may decide not to list it rather than not meet unrealistic expectations. Many clients approach a business brokerage with a need to sell a business, sometimes very urgently. This being said, businesses are typically sold in a matter of months and not weeks.

Selling a business can be a process that takes time and certainly a good amount of patience. Qualified business brokers are professionals that can advise a business owner on what it takes to get a company sold. Work with a reputable (and qualified) business brokerage professional to discuss what it would take to properly sell your company.