Why do most brokers represent both sides of the transaction in business brokering?
Excellent question! Unlike real estate, business brokering requires very special handing, in real estate it’s easy to hire a broker to help find you a house; they just have to go to the MLS and start looking. Businesses have very strict rules regarding the confidentiality so that employees and customers don’t find out the business is being sold. This means that a buyer broker would have to call up every other broker and find out if he/she even wants to co-broker with them, many brokers do not want to nor do they have to. Then they would have to fax them your confidentiality form and then they can decide if they want to send the profile. If it sounds like a lot of, it is! Especially if a buyer requests information of several businesses.
Can brokers acting as dual agents act fairly?
Yes, I believe they can but that completely depends on the integrity of the broker/agent that you’re working with. If your broker tells you confidential things about the seller then he will probably do the same to you so beware.
What can I do to be better prepared to buy a business?
First you need to spend some time soul searching to identify what business would be best suited for you based on time, experience and finances. That said, be open to new ideas if they present themselves. Buyers should also get their finances in order by running their credit to make sure there are no negatives on their report and trying to see what financing might be available to them OTHER than SBA. i.e. a home equity line, borrowing from friends and family, personal credit line. SBA’s are a great tool to buy a business a business but until you find the actual business you won’t know if it qualifies so get you plan “B” game prepared.
I have no experience at buying a business; will you be able to guide me?
Yes! Over 90% of our buyers are first time buyers.