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Eight questions that separate a real broker from a listing mill

Use these whether you come through us or find someone on your own. A good broker will answer all eight without flinching. Watch what happens when you ask number four.

01How many businesses like mine have you closed?

Closed, not listed. Listings are marketing. Closings are proof. You want deals in your industry and your size band within the last three years.

“Of those, how many closed at or above asking?”

02What is your listing-to-close ratio?

Industry-wide, only about one in five listed businesses sells. A broker running well above that is selective and effective. One who dodges the question signs everybody.

“How many active listings do you personally carry right now?”

03How did you arrive at that asking price?

You want comparable closed sales and an SDE or EBITDA multiple with reasoning attached. An inflated number is the oldest trick for winning an engagement, and it costs you months on the market.

“Show me three comparable closed sales.”

04What are your fees, and what am I locked into?

Expect 8 to 12 percent on main street deals, or a Double Lehman scale on larger ones, sometimes with a retainer credited against the fee. The real issue is the engagement term and the tail clause. Twelve months exclusive with no exit is a lot to give someone unproven.

“What happens if I want out at month four?”

05How will you protect confidentiality?

If your staff, customers, or competitors learn you are selling, you lose leverage and sometimes people. Ask about blind profiles, NDA sequencing, and how buyers are screened before anything identifying is disclosed.

“Who sees my financials, and at what stage?”

06Where do your buyers come from?

Listing on the marketplaces is the baseline everyone does. You want a proprietary buyer list, industry relationships, and outbound work done on your behalf.

“Will you contact strategic buyers directly?”

07Who actually handles my deal?

Firms sometimes send a senior name to win the engagement and hand the file to a junior. Get the working person in the room before you sign anything.

“Will you personally be at the buyer meetings?”

08What would you fix before we list?

The best answer is uncomfortable. A broker willing to tell you your books are messy or your customer concentration is a problem is worth three who tell you it is perfect.

“What will a buyer push back on hardest?”

Three answers that should worry you

  • A valuation far above everyone else's. Some firms win engagements by telling sellers what they want to hear, then spend a year talking the price back down. Ask for comparable closed sales, not opinions.
  • Vagueness about who does the work. If the person selling you cannot say plainly that they will be at the buyer meetings, assume they will not be.
  • Pressure to sign a long exclusive today. Twelve months exclusive with no exit and a long tail clause is a lot of leverage to hand someone you met last week.

For fee mechanics in detail, including what is genuinely negotiable, read what business brokers charge. If you are not sure whether you need a business broker or an M&A advisor, start here.

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