39 out of 50 U.S. states do not require you to have a license to sell a business.
However, there are still certifications surrounding business brokerage that help standardize the industry, such as the Certified Business Intermediary (CBI) certification.
At MidStreet, we are CBI certified and use our knowledge and training to provide business owners with the highest quality of service.
To explain more about how the CBI works, we will go over what it is, the requirements, the continuing education required, and why the CBI designation makes a difference amongst brokers.
Let’s hop in.
What Does The CBI Teach Brokers?
A CBI is a certification designed by the International Business Brokers Association (IBBA) to create a standard for how business brokers represent their clients on the buy-side and sell-side of lower middle-market deals.
It provides training on the necessary skills needed to handle business transactions, such as:
By getting their CBI, a broker will become informed on current market trends and the industry, so that they know of any changes made to tax law, contracts, business valuation, or financing options. They will also become part of a large network of professional advisors.
What Are The Requirements to Get a CBI?
The Certified Business Intermediary (CBI) certification requires you to:
- Be a member of the International Business Brokers Association
- Attend one International Business Brokers Association conference
- Have earned 68 credit hours of IBBA or M&A Source courses
- Serve as the lead brokers on 3 business transactions
- Take and pass the official CBI exam
- Submit CBI application and fee to the IBBA
The required courses are selected based on the necessary skills needed for selling businesses, such as business valuation, financial analysis, taxation, and ethics codes.
The Continuing Education Required to Maintain a CBI
Once a business broker has received their CBI certification, they still need to maintain their education through additional courses and recertification every two years.
In total, the CBI certification requires you to have at least 3 years of experience and education within business brokerage.
You will also be required to uphold the code of ethics set by the IBBA which dictates brokers:
- Must follow laws set by their jurisdiction
- Must remain up to date on the industry and market changes
- Should not misrepresent facts in business transactions
- Should not provide legal, tax, or financial advice if they are not licensed
- Must adhere to laws regarding holding trusts or escrow on behalf of a client
- Should document agreements, listings, and agency relationships
- Must uphold their client’s interests and adhere to their fiduciary duty
- Should receive any type of dual representation to relevant parties
- Must submit all written or verbal offers to their client
These are just half of the 18 articles that the IBBA requires of CBI certified business brokers. Learn more about the rest of the IBBA code of ethics here.
Why Hire a CBI Certified Broker?
While a broker holds their CBI certification, they are placed against a different standard than other brokers. They are required to be professional, continue their education on the brokerage process, and uphold the ethics of the IBBA.
These standards help protect the interests of business owners engaging with CBI-certified brokers because they will have peace of mind knowing that the broker will manage your transaction according to worldwide brokerage standards.
Brokers with CBI training will also have a larger skillset of transaction-related matters, allowing them to help you with business valuation, marketing, and deal management. Brokers with less training will usually have less structured processes and will outsource tasks like business valuation.
Find a CBI Certified Broker to Sell Your Business
Now that you know how a CBI certified broker can protect your interests with their extensive training, experience, and strict ethical code, you are probably wondering how to find out if a broker is CBI certified.
Fortunately, the IBBA has a database that allows you to find CBI certified business brokers across the world. This database contains all business brokers who have an active CBI certification.
To learn more about how to find a business broker to sell your company, read “5 Tips to Find The Best Business Broker.”
Knowing what to look for when vetting business brokers can be tough. Contact us today to find out more about how you can find the right business broker.
