If you're selling, the broker may also charge a retainer fee to cover costs associated with marketing the business. Unless you have extensive knowledge of the market and a lot of time to do the legwork, a broker may be your best bet.

A broker will help:

1. Prescreen businesses for buyers. Brokers don't want to represent businesses that are overpriced or are reluctant to open their books.
2. Cut through the mountains of paperwork (including everything from financing and escrow to licensing) associated with the sale of a business, saving both parties time and money and assuring the deal is carried out legally. Brokers serve as a go-between for the lawyers, CPAs, bankers and other agents needed to close the deal.
3. Negotiate the deal, making the most stressful (and important) part of the process smoother and ensuring a fair price.
4. Guide the buyer to the right business that matches his background and goals and provide advice throughout every step of the process.

Action Steps
The best contacts and resources to help you get it done

Be an educated shopper

Make sure you're working with a reputable, experienced broker who will guide you to the business that is right for you.

I recommend: Inc.com has a list of the seven essential questions to ask when choosing a business broker and other information on brokers.

Cast a wide net

Working with a network of brokers allows you to check out more business in a wider geographic area or reach more potential buyers. The best business for you to buy, or the buyer who will give you the best deal, may be a time zone away.

I recommend: Organizations such as the Brokers Network Group, a network of independent brokers throughout the U.S. and Canada, provide buyers and sellers with more options then they would have had working with one local broker.

Run the numbers

How much is the business you're buying or selling really worth?

I recommend: Inexpensive software packages, such as BizPricer, can give you a fair-market appraisal to get a second opinion after talking to a broker.

It pays to advertise

In addition to working with a broker, or if you want to go it alone initially and hire a broker later on in the process, placing an online ad for your business may be the way to go.

I recommend: Business Broker.net enables owners to place ads starting at $50 a month and buyers can use the site for free. The site also offers franchise locations for sale and links to brokers and other services.

Helpful advice for making the most of this Guide

• •  Sealing the deal: To save some money on fees, you may want to hire a broker just to handle the negotiations.
• •  Early innings: If you're serious about buying a business, make a reasonable offer early on because the seller will only allow the broker to show you the company's books after getting an offer. You can always withdraw the offer later.
• •  Do your homework: Talk to other people who've worked with brokers as well as your lawyer, CPA and chamber of commerce to get a list of good, trustworthy brokers.