Questions to Ask a Broker When Selling Your Business

A broker calls and tells you your business could sell for a number that makes you sit up. Before you sign anything, ask questions.

I am Gershon Morgulis, founder of Imperial Advisory. I have an MBA in finance and lead a team of amazing CFOs with 30+ years of experience. Our CFOs have sat on both sides of deals as the owner's finance partner.

The questions that protect you are rarely the ones a broker volunteers. Good questions cover five things: track record, how they price your business, how they find and screen buyers, what they charge, and who runs the deal to closing.

Questions About the Broker's Track Record and Fit

Start here, because everything else rests on whether this broker has actually sold businesses like yours.

How Many Businesses of My Size and Industry Have You Sold?

A broker who lists corner delis all day is the wrong fit for a $15 million manufacturer. The reverse is just as true.

Ask for the count of closed deals in your revenue range and industry over the last few years. Buyer pools differ by size: smaller companies attract individual and financial buyers, while larger ones draw private-equity and strategic acquirers, and a broker without the right network cannot reach them.

What Is Your Closing Rate, and Can I Talk to Recent Sellers?

Plenty of brokers take a listing, post it, and wait. Ask what share of their listings actually close, and how long those sales took on average.

Then ask to speak with two or three owners who sold in the past year, and call them.

Are You Licensed or Registered to Do This?

Here is a question almost no broker checklist mentions, because the answer can be awkward for them. The label business broker is not a protected credential. Rules vary by state: some require a real estate license, and others treat parts of deal work under securities law.

When a sale transfers company stock, the arranger can look like a securities broker. A federal registration exemption now covers many advisors on smaller deals. The exemption applies where the business earns under $25 million in EBITDA (earnings before interest, taxes, depreciation, and amortization) or under $250 million in revenue.

Ask how the broker is licensed or registered where you operate, and get it in writing.

Questions About How They Will Value Your Business

Price is where a broker can quietly earn or lose your trust, so probe the method behind any number they quote.

What Is Your Valuation Method?

A credible broker can explain how they reach a price: the earnings multiple they use, the comparable sales they draw on, and the adjustments they make to your profit. A vague answer, or one big number with no math behind it, is a reason to keep looking.

For many smaller businesses, buyers value off seller's discretionary earnings, which adds back the owner's pay and one-time costs. Larger deals lean on an EBITDA multiple.

Are You Ever Obligated to Sell at a Set Price?

Some listing contracts say that if the broker brings an offer within a set percentage of the asking price, you are bound to sell. That protects the broker's commission rather than your judgment.

Questions About Marketing and Buyer Qualification

Once your business is on the market, how a broker finds and filters buyers shapes both your price and your privacy.

How Will You Find and Screen Buyers?

Ask where their buyers come from: a real database, an active outreach process, or a single listing site. A wider pool of qualified buyers gives you more competition and a better shot at the buyer who truly values what you built.

Ask how they confirm a buyer's ability to pay before your name ever comes up. Furthermore, if there are multiple buyers, how are those buyers prioritized?

How Do You Protect Confidentiality?

Word that your business is for sale can rattle employees, customers, and suppliers. A good broker markets with a blind profile that hides your identity and requires a signed non-disclosure agreement before releasing details.

Ask exactly how they keep the process quiet, because a leak can cost you people and revenue mid-sale.

Questions About Fees, Contracts, and Commitment

Understand the full cost and the length of the commitment before you sign, so nothing surprises you at closing.

What Is Your Commission, and Are There Upfront or Retainer Fees?

Most brokers work on commission, paid as a percentage of the sale at closing. Ask the rate, and ask whether they also charge a retainer or upfront fee and whether that amount is credited against the commission.

Get the full fee picture in writing before you commit.

What Are the Listing Term and Exit Terms?

An exclusive listing period of about a year is common, but the length and the exit terms are yours to negotiate. Ask how long you are locked in, what ends the agreement early, and whether the broker still earns a fee if you find your own buyer.

Questions About Who Actually Runs the Deal

A sale runs from a first offer through due diligence to a signed purchase agreement, so find out who does that work and how your final proceeds are protected.

Who Handles the LOI, Due Diligence, and Purchase Agreement?

Ask who drafts and negotiates the letter of intent, or LOI. The LOI is mostly non-binding, but it sets the proposed price and terms and frames the rest of the deal.

A broker finds buyers and helps tell your story. Your attorney handles the purchase agreement, and your finance team stands behind the numbers through sell-side due diligence, the buyer's deep review of your books.

Ask who prepares the data room, the organized set of financial and legal records a buyer will demand. Scrambling for it mid-deal costs you time and credibility.

How Will You Help Protect My Net Proceeds?

The headline price is not what you keep. How the deal is structured, as an asset sale or a stock sale, changes your tax bill and who carries which risk. Some of that is settled before the LOI.

Under the IRS residual method, the buyer and seller allocate the price across the assets and report it the same way on Form 8594. That split moves how much of your gain is taxed as ordinary income versus at capital gains rates.

A broker rarely owns this part. Ask who on your team will model the after-tax result of different offers, so you compare what you actually take home.

Where a Fractional CFO Fits Alongside Your Broker

A broker and a CFO are two different jobs, and the strongest sales use both. The broker finds buyers and runs the marketing.

A fractional CFO, an experienced finance leader working part-time, prepares the numbers and data room so they survive scrutiny. At Imperial Advisory, our CFOs sit on your side of the table.

We get your financials provable, prep the data room, and stand behind them through sell-side due diligence. We also help you weigh how the timing of due diligence and deal structure change your final result.

We see the same pattern often: an owner making good money who cannot cleanly prove it when a buyer finally comes knocking. Deciding the kind of CFO you need, or getting outsourced CFO support if you have no finance chief, is what turns a nervous sale into a confident one.

Frequently Asked Questions

A few more questions owners ask as they weigh hiring a broker.

Do I Need a Broker to Sell My Business?

Not always. If you already have a serious buyer, you may not need one to find the buyer, though you still want an attorney and finance help for the paperwork and structure.

For many owners without a buyer in hand, a good broker widens the pool and runs a process you do not have time to run yourself.

What Is the Difference Between a Business Broker and an Investment Banker?

Broadly, business brokers handle smaller sales, often owner-operated companies, while investment bankers and mergers and acquisitions advisors run larger, more complex deals with strategic and private-equity buyers.

The line is fuzzy, and titles are not regulated, so judge the person by their deal experience at your size rather than the label. Ask what deals in your range they have actually closed.

When Should I Bring in a CFO Before a Sale?

Earlier than most owners think. The best time to get your financials sale-ready is a year or more before you list, so a buyer sees clean, consistent numbers.

Even a few months of financial help before diligence can steady your story and protect your price. But getting the team in place, producing a few years of audited financial statements, and working on improving margins and cash flow, reducing or offloading risk, and focusing on the things buyers really care about will pay dividends when you get to the closing table.

Before You Sign With a Broker

The right broker can be worth every point of commission. The wrong one can cost you months, your privacy, and a chunk of your final check.

The questions above are how you tell them apart before you are locked into a contract.