How to sell a million-dollar business

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(FORTUNE Small Business) -- Dear FSB: What is the best way to sell a small business valued between $1 to $2 million?

- Mark, Westbury, N.Y.

Dear Mark: A business broker can be your best ally in selling a business of that size, according to Carl Cusano, president of the N.Y. Association of Business Brokers and principal of Capital Business Advisors.

"An experienced broker will have various resources, including affiliations, a large network and experience to sell your business," said Cusano. "The best thing to do is find someone who can demonstrate a successful track record. When you're interviewing the broker, ask them, 'How many of these types of businesses have you sold in the past?' and, 'What is your plan to market the business?' The key is a proactive plan. You can't just throw it on a website and wait for buyers to come to you. There are already so many businesses on the Internet. If you do that, yours will get lost."

Cusano says using a business broker is something a business worth $250,000 and up should consider. But the most important thing that brokers are looking for is profitable businesses. Those that are marginal or not profitable will find it difficult to find a broker.

Brokers work on a percentage-commission basis. Most brokers will also charge an upfront retainer to help cover marketing costs, which is typically rebated when the business is sold. Standard broker fees run from 8% to 12%, with some brokers charging an additional minimum. Unlike the real-estate market, there is no multiple listing service to list businesses for sale. What a seller is paying for is the broker's know-how and ability to get top dollar for the business.

"A good broker will take a proactive approach, identifying the likely buyer in their industry and soliciting them directly," said Cusano. "A buyer can come from anywhere, but many times it's someone within the same industry or a synergistic industry who is most likely to acquire your business. They are generally not trolling websites for information."

A key way to find out if your broker is reputable is to check them out with the Better Business Bureau.

"Our site offers a free reliability report online," said Alison Preszler of the Better Business Bureau. "It will tell you how many complaints have been lodged against the company and, more importantly, if the company worked to resolve the problem. You can also go to the website to find brokers that are accredited by the BBB. Accreditation means that they uphold the strict standards of the BBB for ethics, honesty, and good work."