Nevada’s business-friendly environment serves as a magnet to small start-ups, high-tech companies, IT professionals and others who recognize the benefits of doing business in our state.

Maybe you’re looking to buy an existing business as your first entrepreneurial experience, or maybe you’re seeking to expand an existing business with the purchase of a company compatible with your current activities. Or you may be thinking of selling your current business so you can pursue other opportunities.

If you’re in any of these situations, it’s a smart idea to hire a business broker, a professional who buys and sells existing businesses on behalf of clients. They’re typically familiar with the local business market, including existing businesses that may be offered for sale along with business valuation procedures.

Nevada Business Broker Permit

Before hiring a business broker, make sure you’re getting someone who can provide advice and consultation — a company or individual who’s interested in the success of your business – not in simply closing another deal.

In order to become a business broker in Nevada, these professionals must obtain additional education and training to receive a business broker permit issued by the state. So, the most obvious question to ask is: Do you have a state-issued business broker’s permit? If the broker is certified, keep talking. If he or she doesn't have a Nevada state permit to operate as a business broker, keep looking.

Once you find a certified business broker, or brokerage firm, it’s time to get down to business – your business. Here are some of the questions to ask during your initial consultation with a licensed business broker in Nevada.

1. What experience do you have in buying or selling the type of business I’m looking to purchase or sell? Does the broker understand your business model? Use industry jargon? Ask the right questions concerning your needs now and in the future? Look for specifics that indicate a true understanding of your business needs, not general answers.

2. What trade or industry associations do you belong to? Your business broker shows professionalism and current information with membership in state and regional business broker groups, so ask about the broker’s connections. There’s a large, statewide business broker organization (Nevada Business Brokers Association), as well as regional groups that share information, leads and other valuable information.

3. How long have you been conducting business in my intended service area? It’s a big state. Some brokers cover specific cities or regions. Others cover the entire state. Look for business brokers who can work with you to meet your objectives. A good business broker does more than locate warehouse space. He or she will deliver helpful connections, referrals, and mutually-beneficial collaboration with other regional businesses. Work with somebody who knows the local business community.

4. What services will you provide? Ask to see a standard contract. Then discuss your needs. For example, if you’re buying an existing retail outlet, you need exposure and foot traffic – a visible location. If you’re making widgets, a manufacturer doesn't require foot traffic, but it might require extra loading bays for shipments. Work with a broker who goes with you on “walk-throughs” of potential businesses.

A good business broker will point out the positives and negatives of each company. A broker who’s constantly “selling” isn't necessarily looking out for your business’ best interests. Again, look for someone who’s there to help your business succeed, and if a business is wrong for whatever reason, it’s great to have a professional business broker by your side to point out potential problems, as well as benefits, to each enterprise you visit.

5. What resources do you have? Is the certified broker an independent agent? A member of a local brokerage group? Connected to regional real estate agents? Successful business brokers rely on connectivity. They work with real estate agents, local business and service organizations, banks and other lenders. These business brokers maintain a long list of helpful contacts that can be put to use by you.

If your business broker is also good friends with the bank’s business lender, you've made an important connection. Ask who the broker works with in your region.

6. What references can you provide? Look for references related to your business, and check them. Call the reference to discuss the activities of the broker. Good recommendations are reassuring, but negative comments may be a sign to run for the hills.

7. How many projects are you currently working on? You want the broker busy, but also available for your business.

8. Check out the company online. Look at its website. Is this the kind of business you want to work with? And if they don’t have a website, keep looking for a broker. Also check social media sites to see if there is feedback, either positive or negative, on the Web.

9. How many closings has your  brokerage business completed in the past 12 months? Obviously, the more the better. Ask for a list of sales. It’s public information, so there should be no confidentiality issues.

10. What is your rate schedule? Some brokers charge more than others, usually depending on the services provided. Don’t necessarily go with the broker who comes in with the low-ball bid, or you may end up with low-ball service. Remember that commissions are negotiable. However, if you negotiate a lower commission, there’s less financial incentive on the part of the broker to buy, sell or lease your business.

Where you locate your business, or what business you buy, may determine your ultimate success, so unless you know business realities and business valuations, hire a professional. Then start asking questions, and don’t stop until you have all the answers you need to select the right broker to work with you in building business success.

For more information on business brokers in Nevada, contact the Nevada Real Estate Division: http://red.nv.gov/Content/Contact/NRED_Directory/

 

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of Zions Bancorporation, N.A. Member FDIC