Business Broker Red Flags: 10 Signs to Walk Away Before You Sign
Selling your business isn’t just another transaction—it’s the end of a chapter you’ve written with your own hands. Whether you’ve owned your business for five years or fifteen, deciding to sell is deeply personal. And when the time comes, choosing the right business broker can make or break the outcome.
Hiring a broker to guide the sale of your business can be an incredibly smart move. A qualified broker brings valuation expertise, buyer networks, confidentiality practices, negotiation skills, and experience navigating the complexities of a small business sale. But that doesn’t mean all brokers are created equal.
The wrong broker can waste your time, misprice your business, mishandle sensitive information, or damage your chances of a successful exit.
In this post, we’re diving into the ten red flags you should be on the lookout for when evaluating business brokers. These warning signs are based on real-world experience, stories from other business owners, and the lessons I learned selling my own business.
If you’re preparing to meet with brokers or are just starting to explore this option, I recommend grabbing my free checklist:
Top Questions to Ask Your Potential Business Broker
Use it during your interviews to help you spot the red flags early—and avoid working with someone who doesn’t deserve your trust.
Why Choosing the Right Broker Matters
It’s easy to assume that once you decide to sell your business, the rest will fall into place. But selling a business is not like selling a house. It’s more complex, more emotional, and more confidential.
While you’re still running your business day-to-day, your broker is the one:
Pricing your business
Writing the listing and business summary
Attracting and screening buyers
Coordinating due diligence
Negotiating on your behalf
Managing timelines, documents, and relationships
You’ll rely on this person to represent your hard-earned legacy. That’s why doing your due diligence upfront—and learning what not to overlook—is one of the most valuable steps you can take.
Red Flag #1: They Promise a High Sale Price Without a Valuation
You may feel tempted to go with the broker who gives you the highest number. It’s flattering to hear that your business is worth more than you expected. But be careful. Inflated pricing is one of the most common tactics brokers use to win listings.
Here’s how it goes:
A broker gives you an attractive number without doing a proper valuation. You sign a contract based on hope. Months go by with no serious buyer interest. Eventually, you’re advised to lower the price to attract offers.
Now your business appears “stale” to buyers—and you're less likely to get a strong offer.
What to expect instead:
A professional broker will evaluate your financials, consider industry benchmarks, assess market conditions, and back their suggested listing price with real data. They won’t shy away from telling you the truth.
Red Flag #2: They Don’t Ask for Financials Up Front
If a broker is ready to list your business after one phone call or without reviewing your documentation, that’s a major red flag.
Your financials are the foundation of your business’s value. Without a review of your profit and loss statements, tax returns, balance sheet, and current performance metrics, a broker has no business determining a price or marketing plan.
What to expect instead:
A broker should request at least three years of financials, current YTD data, and a discussion around any personal or one-time expenses that impact adjusted earnings (also known as “add-backs”).
Red Flag #3: They Can’t Clearly Explain How They’ll Market Your Business
One of the primary roles of a broker is to market your business discreetly yet effectively. If you ask, “How will you market my business?” and the response is vague—or worse, overly generic—you’re not dealing with someone who has a plan.
You should be given details on:
What platforms they’ll list on (BizBuySell, BusinessBroker.net, etc.)
How they write confidential teaser listings
Whether they use email outreach or buyer databases
Their screening process to protect your confidentiality
What to expect instead:
A clear, step-by-step outline of how they’ll position your business, where it will be listed, and how they’ll keep your identity protected during the buyer search.
Red Flag #4: They Specialize in a Different Type of Business
Some brokers specialize in ecommerce brands. Others focus on main street businesses. Some only sell companies with revenue over $5 million. A broker who doesn’t understand your industry or business model may struggle to attract the right buyers—or position your value correctly.
If you own a small, local service business, and the broker only talks about tech startups or franchise sales, they’re probably not the right fit.
What to expect instead:
Ask for examples of similar businesses they’ve sold. Ideally, they should have experience in your industry and price range.
Red Flag #5: They Pressure You to Sign Right Away
You should never feel rushed or pressured into signing a listing agreement. If the broker is pushing you to commit quickly, avoids answering questions, or acts irritated when you want time to think—walk away.
This relationship needs to be built on transparency and trust. A professional broker will give you time to review the contract, consider your options, and even speak with past clients if you ask.
What to expect instead:
Clarity on the terms of the agreement, including exclusivity, duration, cancellation clauses, and commission structure. A good broker will walk you through everything and give you time to decide.
Red Flag #6: Their Fee Structure Is Confusing or Unclear
Most business brokers charge a commission (typically 8–12% of the sale price), with minimum fees or flat rates depending on deal size. But some will also charge upfront fees, monthly retainers, or “marketing costs.”
If a broker is evasive or vague about how and when they get paid, you could be left with surprises later.
What to expect instead:
Full transparency about commission, minimum fees, additional costs (if any), and how those fees are handled if you or someone else finds the buyer.
Red Flag #7: They Communicate Poorly from the Start
Your broker will be managing sensitive, complex conversations with buyers, attorneys, accountants, and possibly your landlord or franchise rep. If they’re slow to return calls, unclear in their answers, or frequently “too busy,” that’s a preview of what’s to come.
Communication can make or break a deal.
What to expect instead:
Professionalism, responsiveness, and clear next steps throughout your discovery process and beyond.
Red Flag #8: They Don’t Ask About Your Goals or Exit Timeline
Selling a business isn’t just about the price. It’s about your goals for the future. Do you want to exit quickly? Transition slowly? Make sure your employees are retained?
A broker who doesn’t ask what’s important to you is missing the big picture. The right deal is one that aligns with your priorities.
What to expect instead:
A conversation about your personal goals, post-sale plans, ideal timeline, and any dealbreakers or preferences you may have.
Red Flag #9: They Can’t Provide References or Recent Results
Before you hire a broker, you have every right to ask about their track record. If they’ve helped other business owners, they should be able to provide testimonials, examples of businesses they’ve sold, or client references.
If a broker avoids the question, dodges the topic, or blames “confidentiality,” it’s worth pressing further.
What to expect instead:
Willingness to share recent transactions or connect you with past clients who’ve had positive experiences.
Red Flag #10: They Make Everything Sound Too Easy
Selling a business is not easy. It takes time, coordination, paperwork, and negotiation. A broker who says things like “I’ve got buyers ready,” “This will be quick,” or “You won’t have to lift a finger” is likely overselling.
Overpromising is often a sign that they’re focused on closing the listing—not the deal.
What to expect instead:
An honest timeline, a realistic sense of how involved you’ll need to be, and a broker who is clear about the process from start to finish.
Protect Yourself (and Your Business)
The broker you choose will shape your selling experience, influence the offers you receive, and impact how smoothly (or stressfully) the process goes.
Take your time. Ask questions. Trust your instincts.
And remember: you don’t have to go into broker interviews unprepared. I created a free tool to help you spot these red flags in real-time and choose a broker who truly supports your goals.
Download the free guide: Top Questions to Ask Your Potential Business Broker
This printable checklist will help you ask the right questions, take better notes, and walk away from any broker who isn’t a strong fit.
Final Thoughts
Selling your business is personal. You deserve to work with someone who values your time, protects your hard-earned success, and helps you walk away with peace of mind.
Red flags aren’t always loud or obvious. But when you know what to look for, you can avoid costly mistakes and make confident decisions.
You’ve built something incredible. Now it’s time to find the right person to help you pass it on.