How to Evaluate a Business Broker Before You Buy a Business

 When buying a business, most people focus on the seller and the financials—but overlook a critical player in the deal: the business broker.

The wrong broker can delay or even kill a deal. The right one can help it close smoothly.

Don’t Go Around the Broker

If a business is listed with a broker, always go through them.

Trying to contact the owner directly can:

• Damage trust

• Create unnecessary friction

• Reduce your chances of completing the deal

Respecting the process keeps negotiations professional and productive.

Understanding the Broker’s Role

A competent business broker typically handles:

• Valuing and preparing the business for sale

• Marketing and finding buyers

• Assisting with deal structure and financing

In many cases, they act as an intermediary, advisor, and facilitator all in one.

The Two Types of Brokers

Not all brokers operate the same way.

Some act like “shopkeepers”—taking listings at any price and simply trying to match buyers.

Others act like “experts”—setting realistic expectations, guiding sellers, and ensuring deals are viable.

The second type is far more valuable to you as a buyer.

Why Expectations Matter

A well-prepared seller understands:

• What the business is worth

• What terms are realistic

• How deals are typically structured

If the broker hasn’t set these expectations, you may face:

• Unrealistic pricing

• Resistance to financing terms

• Deals that fall apart late in the process

How to Vet a Broker

Before engaging seriously, do basic due diligence:

• Review their background and experience

• Check their online presence and activity

• Ask about past deals and deal structures

• Listen for how they talk about pricing and financing

Strong brokers will provide clear, practical answers—not vague or evasive ones.

What Good Brokers Do Differently

A skilled broker:

• Sets realistic pricing with the seller

• Educates sellers on deal structures like financing

• Encourages reasonable offers

• Focuses on closing deals—not just listing businesses

This creates a smoother path for buyers to complete acquisitions

Key Takeaways

The quality of a business broker directly impacts your ability to complete a deal. Choosing brokers who set realistic expectations and understand deal structure will significantly improve your chances of success.

👉 Want deeper dives like this? Join my email list at DavidCBarnettList.com for early access to videos, insights, and 7 free bonus gifts.

LIVE Expand or Grow? The Smart Way to Scale a Business

 

What makes more sense for business expansion — entering a new market or growing market share?

New Livestream guest – Gary Kunkle

I’m happy to have Gary join me on a live broadcast.

Gary is a business advisor and researcher who has spent years studying how companies grow, where they go wrong, and what actually drives profitable expansion.

Tune in as we discuss the critical decision business owners face when scaling — whether to expand into new markets or focus on capturing more share in an existing one.

We’ll also explore the hidden dangers of growth, why not all customers are profitable, and how smarter growth strategies can lead to better outcomes.

This is a ‘must see event’ for anyone looking to grow a business or make smarter strategic decisions.

Be sure to join live so that you can ask questions, replay will be available.

Set yourself a reminder on YouTube here: https://youtube.com/live/HPHYXJecP8o 

We’ll be going live April 30,2026 Thursday at 2:35PM Atlantic Time and 1:35 PM Eastern Time

See you there!

David C Barnett

Stop Wasting Time on Bad Deals (Use These 4 Tools)

 

**New Video Alert!

Most business buyers make the same costly mistakes…

They waste time on bad deals, get ignored by brokers, and sometimes overpay without realizing it.

In this video, I break down 4 practical tools that can help you avoid those traps and move forward with confidence.

Watch the video here: https://youtu.be/wZ5rpWtHabo 

Cheers

See you over on YouTube

David C Barnett

Can You Ask a Business Broker for Commission Back?

 It’s a fair question: if real estate agents sometimes offer commission rebates, can a business buyer ask a broker for part of their commission?

In most cases, the answer is no—and here’s why.

Why Business Brokerage Is Different

Real estate and business brokerage may look similar, but they operate very differently.

A business broker typically handles:

• Valuation of the business
• Marketing and finding buyers
• Assisting with financing and deal structuring

In real estate, these roles are often split across multiple professionals. In business sales, the broker does all three—often over months or even years.

Why Commission Rebates Are Rare

Business brokers usually rely on earning the full commission to justify the time and effort invested in each deal.

Unlike real estate:

• Deals take longer to close
• Fewer transactions succeed
• Workload per deal is significantly higher

Because of this, brokers are far less likely to share or rebate their commission to buyers.

Where Commission Discounts Actually Happen

If a commission reduction occurs, it usually comes from the seller side, not the buyer.

This often happens when:

• The seller receives a lower-than-expected offer
• The broker agrees to reduce their fee to help close the deal

Buyers typically don’t have leverage to request part of the commission directly.

A Smarter Strategy for Buyers

Instead of asking for a rebate, buyers can sometimes benefit from creative deal structuring.

In certain situations, a broker may:

• Defer part of their commission
• Help bridge a financing gap
• Structure payments to keep the deal alive

This approach aligns everyone’s interests without directly cutting the broker’s compensation.

Understanding the Market Reality

Business brokerage is a relationship-driven, high-effort process with fewer completed transactions than real estate.

Because of this, compensation structures are less flexible—and buyers need to adjust expectations accordingly.

If you want to learn more about creative private investments, check out my book Invest Local — available on Amazon or as a PDF from DCBBooklist.com

Key Takeaways

Business brokers rarely share commissions with buyers because of the complexity and workload involved in each deal. Instead, buyers should focus on creative deal structures that help bridge gaps without reducing broker incentives.

👉 Want deeper dives like this? Join my email list at DavidCBarnettList.com for early access to videos, insights, and 7 free bonus gifts.

A great Interview with Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast

 

If you think a big EBITDA number alone will get you a big exit… you’re in for a rude awakening.

In this episode, John sits down with longtime business advisor David Barnett—who’s helped sell hundreds of companies—to break down what actually drives value when it’s time to sell your business.

From misunderstood multiples to messy financials, from distressed sales to “built-to-sell” winners, this conversation pulls back the curtain on how deals really get done—and why most owners leave money on the table.

Because the reality is simple:

 Buyers aren’t just buying your profit… they’re buying how confident they are that profit will continue without you.

 What you’ll learn in this episode:

 Why EBITDA alone doesn’t determine your valuation 

 The 2 questions every buyer asks before making an offer 

 How poor systems, bad margins, and owner-dependence kill deals 

Most businesses don’t sell because they weren’t built to sell. 

If you want a real shot at a high-value exit, this episode is your roadmap.

LIVE - How a Business Broker Dominates One Industry with Bryan Baese

 

What happens when a business broker focuses on just one industry?

New Livestream guest – Bryan Baese

I’m happy to have Bryan join me on a live broadcast.

Bryan is a business broker who specializes exclusively in auto repair shops, and he’s built a strong business by focusing on a single niche.

Tune in as we discuss industry-specific business brokerage, how specialization can create real opportunity, and the biggest mistakes business owners make when preparing to sell.

We’ll also explore how the buyer landscape is changing and what it means for brokers and sellers today.

This is a ‘must see event’ for anyone interested in business brokerage, buying or selling a business, or building expertise in a specific industry.

Find Bryan online here: https://www.rpmshopsales.com/ 

BDC vs SBA: The Truth About Buying a Business in Canada

 

**New Video Alert!

Are you an American thinking about buying a business in Canada? Or a Canadian wondering how the BDC compares to the SBA?

In this video, I break down:

Whether Americans can legally buy Canadian businesses

*How BDC financing actually works (and why it’s NOT the SBA)

*The biggest cross-border tax trap most buyers completely miss

*Why a great deal can quickly become a bad one after taxes

If you're considering international business acquisition, this is a must-watch before making an offer.

Watch the video here: https://youtu.be/gq9dM_bsvz4 

Cheers

See you over on YouTube

David C Barnett