How Can Buyers Tell the Good Business Brokers From the Bad Ones?

I’ve read listings of brokers who said you can easily 3x the revenue in a year.

I’ve reached out on listings and received information without ever being asked to sign a confidentiality agreement.

I’ve received every iteration of financials I can imagine. Only projections for one. Only monthly revenues written on a paper towel for another. Even a business where they wouldn’t release any financials but the marketing clearly lists it as the business being for sale.

There’s no guaranteed way you can sort out if the broker on the other end is ethical and knows what they are doing but there are some red flags.

I’ll give you my best tips below I learned from years of searching for a business:

1. When you reach out, the broker should respond with a confidentiality agreement before releasing information.

2. After completing the confidentiality agreement, you should receive an info packet on the business containing actual financials and a business summary.

3. If a broker is making promises on growth and future performance, they are shady.

4. If the broker always always answers emails with a phone call, run away. (Hint: they won’t put anything in writing to dodge future accountability).

5. “Brokers” who are clearly real estate agents with no experience will waste your time and erode your sanity.

Bad brokers are everywhere and you’ll run into them eventually. Know what to watch for so you can steer clear.