9 questions to ask a business broker before you hire one

The wrong broker is worse than no broker. A bad broker will overpromise a high price to win your listing, underinvest in actually selling it, and lock you into a 12-month exclusive agreement while your business sits. The questions below will tell you, in the first meeting, whether you’re talking to someone worth hiring.

Why vetting your broker actually matters

Not every broker closes deals. One of the clearest patterns in business brokerage: brokers who charge large upfront retainers often have an incentive to take on any listing, regardless of how sellable the business actually is. They collect the retainer whether or not the business sells.

A broker working on pure commission only makes money when you do. That’s the alignment you want.

Here are the questions, and what the answers tell you.

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Question 1: What percentage of your listings actually sell?

This is the single most important number. Press for a real answer, not a marketing claim.

A broker with a strong process should close 50% or more of their listings. If they’re listing 100 businesses a year and closing 10, that’s a 10% close rate. Meaning 90% of the owners who trusted them didn’t sell. That broker either takes on businesses that aren’t ready to sell, prices them too high, or doesn’t invest in the marketing and buyer sourcing needed to get deals done.

A healthy close rate suggests the broker vets the businesses they take on, prices them realistically, and has a buyer network deep enough to produce real activity.

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Question 2: How many active listings do you have right now?

A solo broker juggling 40 listings cannot give each one meaningful attention. Ask how many they currently manage personally, not their firm, them.

There’s no magic number, but a solo broker with more than 15 to 20 active listings is probably spread thin. A partner in a firm with support staff can handle more.

Follow up: “What does your typical week look like when you have an active deal in due diligence?” You want to understand if they slow down on other listings when the work gets heavy.

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Question 3: Have you sold businesses in my industry before?

Industry experience matters more than most owners realize. A broker who has sold HVAC businesses knows:

• What buyers for HVAC businesses care about (maintenance contract base, service trucks, tech turnover, licensing requirements)
• Which lenders do SBA deals in the trades
• What the business is likely to sell for, based on actual recent comps
• Which red flags buyers will find in due diligence

Ask for examples. Ask if you can speak with one of those sellers.

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Question 4: Can I see a sample of your marketing materials?

This question separates professional operations from amateurs fast.

A serious broker produces a Confidential Information Memorandum (CIM), a detailed document that presents your business professionally to buyers. It covers the business overview, financials, operations, growth opportunities, and why it’s a strong acquisition. It’s the equivalent of a well-done prospectus.

A broker who hands buyers a one-page print-from-a-template listing with your revenue and asking price is not marketing your business. They’re doing the minimum.

Ask specifically: “What does your blind ad look like, and where do you advertise it? What does the CIM look like?”

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Question 5: How do you screen buyers before sharing information about my business?

This is about confidentiality, the thing most sellers care about most.

Before any qualified buyer learns what business they’re looking at, they should have:

1. Signed a Non-Disclosure Agreement (NDA)
2. Provided proof of financial capacity (bank statement, lender pre-qualification, or private equity credentials)
3. Been screened for deal intent and timeline

A broker who sends your business details to anyone who calls is putting your employees, customers, and supplier relationships at risk. If confidentiality gets broken before closing, it can collapse the deal and damage the business.

Ask: “Walk me through exactly how you screen a buyer before releasing my business’s financials.”

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Question 6: Do you work exclusively for sellers, or do you represent buyers too?

Some brokers represent both sides of the same deal. This is called dual agency, and it creates a conflict of interest. The broker’s commission comes from the sale closing, so their incentive is to get the deal done, not necessarily to get you the best terms.

A broker who exclusively represents sellers has a cleaner obligation to you.

This isn’t disqualifying on its own, many brokers do dual transactions, but you should know going in, and you should have your own attorney reviewing the purchase agreement regardless.

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Question 7: What are your fees, exactly?

Get this in writing before you sign anything.

The standard structure for small businesses under $1 million is a 10% commission on the sale price, paid at closing. For larger deals, brokers often use a tiered structure (10% on the first million, 8% on the next million, etc.).

Some brokers charge an upfront retainer of $5,000 to $25,000 that may or may not be credited against the final commission. For a larger transaction, where the broker will invest significant time in preparing marketing materials, a modest retainer is normal. A large upfront fee with a weak commission structure is a red flag.

Ask specifically: “If the business doesn’t sell, what do I owe you?”

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Question 8: What’s the term of your listing agreement, and what are my options if things aren’t working?

Exclusive listing agreements typically run 6 to 12 months. That’s a serious commitment. Before you sign:

• Can you terminate early? Under what conditions, and with what notice?
• Is there a tail provision? (This means if you end the agreement and then sell to someone the broker introduced, you may still owe commission. Tail periods of 12 to 24 months are common.)
• What performance benchmarks are they committing to? Some agreements include minimum marketing activities; most don’t.

Six months with a performance review clause is a better deal than a 12-month lock-in with no accountability built in.

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Question 9: Can I speak with three sellers whose businesses you’ve closed in the past year?

A good broker will have this list ready. A great broker will volunteer it without being asked.

When you call those sellers, ask:

• “Did the business sell for close to the price they originally quoted you?”
• “How did they handle confidentiality?”
• “Were there surprises in due diligence? How did they help?”
• “Would you use them again?”

One bad reference is a data point. Two is a pattern.

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Red flags to watch for

They give you a high valuation in the first meeting without reviewing three years of financials. This is called “buying the listing”, inflating your expectations to win the contract, then quietly pushing for a price reduction three months later.

They’re vague about their process. A broker who can’t clearly explain how they find buyers, how they screen them, and how they manage confidentiality doesn’t have a real process.

They want a large upfront fee before doing any work. BizBuySell’s learning center puts it plainly: “Those who charge the highest upfront fees often provide the most seductive business valuations.”

They use a real estate license to sell businesses. Real estate and business brokerage are legally separate and practically different. Selling a HVAC company requires financial analysis and deal structuring skills that a property transaction doesn’t.

They can’t name a recent comp in your industry. If they don’t know what HVAC businesses or plumbing companies have been selling for in the past 12 months, they’re pricing yours in the dark.

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Common questions owners ask

What credentials should a business broker have?

Look for a CBI (Certified Business Intermediary) from the International Business Brokers Association (IBBA), or an M&AMI designation. These require training, examination, and continuing education. They're not required to practice, but a broker who invested in them is more serious than one who hasn't. Also confirm they're a current IBBA member, the organization tracks closed transactions and complaints.

How do I know if a broker's close rate is good?

Ask specifically: 'Of the businesses you listed last year, how many actually sold?' A well-run broker should close 50% or more of their listings. A broker who lists 80 businesses and closes 8 has a 10% close rate, that's a red flag. They're taking on any listing to collect fees, not selecting good candidates they can actually sell.

Is it a problem if a broker also does real estate?

It can be. Business brokerage requires specific skills, reading financial statements, recasting earnings, structuring deals, working with SBA lenders, negotiating representations and warranties. A real estate agent who 'also does businesses' on the side rarely has this depth. It's not a hard rule, but ask pointed questions about how many business deals (not real estate deals) they've closed in the past two years.

What should be in the listing agreement I sign?

The key things to review: the exclusivity period (how long you're locked in, typically 6–12 months), what triggers early termination and what fees are owed if you cancel, whether the tail provision applies (if you sell to someone the broker introduced after the agreement expires), what marketing the broker is required to provide, and how the commission is calculated and when it's due.