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Business Broker Pricing and Fees When Selling a Business

How much do business brokers charge

Everyone knows that if you decide to sell your house and hire a Realtor to market it for you, once your house has been sold, the real estate agent earns a commission on the sale. But what about if you want to sell your business?

Selling a home is easier and less complex than selling an eCommerce business, which has considerably more variables than just the listing price. The one key similarity is that business brokers are also paid a commission once the business has been sold, and the percentage can vary from one brokerage to another. In many instances, the fees are not set in stone and will depend on exactly what the business broker does for the seller.

Sometimes referred to as a “success fee,” these fees often raise several questions in the seller’s mind. Is it better to try selling your business on your own and save on the cost of a commission? What exactly does a broker do for someone selling their business, and is it worth the cost? How can you judge whether a broker is going to be effective?

Those are good questions to ask in advance. Website Closers wants to give you a better sense of why it’s in your best interest to sell using the skills and talents of our professional business brokers. Selling your business is far more complex than selling products and services that are in high demand. Our brokers have sold every conceivable type of online business, and we can work with you to ensure you’re getting top dollar for the company you worked so hard to build.

We also feel its important for you to understand how business brokers work, and to know how they get paid. Working with a business broker can be the smartest move you’ll make when it comes time to sell your online business.

We can also help answer some of the questions you have about what a business broker does, how their work can impact the sale of your business, and how they earn their commission. Read on.

What Does a Business Broker Do?

Two of the first questions that sellers should always have about a business broker is what they do, and how they get paid. These are good questions to ask up front.

A professional business broker facilitates the buying and selling of a business between its owner and a prospective buyer. the purchaser and the owner of the business. They can be an intermediary, or an advisor, who assists a buyer or seller of a business during the sales transaction.

Business brokers who represent a buyer will help that individual find the right kind of business, get them pre-qualified for financing the deal, and advise the buyer during the acquisition process.

The business broker can also provide an opinion on how much the business being sold is worth, review financial statements and prepare and negotiate the offer. If the business gets under contract, the broker can assist in the due diligence phase.

When representing the seller, the broker can help the business owner determine the most accurate price for the company, gather relevant business information and financial documentation for the valuation, and confidentiality market the business for sale, while also vetting all prospective buyers.

Why Work With a Business Broker?

Understanding what a professional business broker does should make it obvious that having one at your side as your sell your business is essential. Through the assistance and guidance of a professional business broker, you’re going to get:

  • – Valuable market insights
  • – The best and most accurate valuation for your business
  • – Significant help navigating the complex sales process
  • – Critical help vetting prospective buyers
  • – The ability to avoid costly mistakes during the sales process
  • – Accountability

Professional business brokers take the time to understand your business, its strengths and your needs and goals, and they work hard to find a buyer who will be a match for your company.

Business brokers can also help you maintain confidentiality throughout the sales process, ensuring that your competitors, employees, customers, and suppliers won’t know the name of the company being sold if you don’t want them to.

Business brokers have expert knowledge of the sales process and the right training to ensure your interests are fully protected during the transaction. They also know how to ensure your company doesn’t get damaged once you’re ready to sell it.

Selling a business is fraught with potential problems, and without an experienced hand at your side, there are likely to be plenty of mine fields to dodge along the way. Hiring a business broker can ease the pain of navigating your way through this complex process, and it’s a definite way to get value for your investment, because that’s just what a professional business broker is: an investment in the successful and profitable sale of your business.

The bottom line is that hiring a skilled and experienced business broker helps sellers earn more money for their business, helps prevent deals from falling apart, can help prevent buyers from overpaying for a business and can deliver strong results to both buyers and sellers. This is why business brokers work for a fair commission after they have performed an honest day’s work.

How Are Business Brokers Paid for their Work?

One reason why brokers often refer to their commission as a “success fee” is that the commission is based on the successful sale of the business, similar to a real estate agent’s commission that comes only if the house is sold.

For the services rendered to a seller, a business broker’s commission is typically a percentage of the final purchase price of the business, the same approach as with a Realtor. Brokers get listings in the same way that real estate agents do, and once there is a closing, both are paid a percentage of the final sales price.

If the business broker is working with a buyer, the seller’s business broker may pay a “co-brokering” fee, or a portion of their commission to the buyer’s business broker. It’s similar to the arrangement real estate agents have when one Realtor introduces a buyer they represent to a listing and a sale is made. If the seller’s broker will not agree to co-broke with the buyer’s broker, often times the buyer will then pay their broker for any services rendered, usually a flat fee paid at the time of the closing.

What is the business broker’s commission?

Because selling a buying is a rigorous and challenging process, that’s where a business broker comes in to help navigate the transaction. Commission fees are typical for brokers who get results. Commission fees can also vary, depending on:

  • – The type of business being sold
  • – Its market value
  • – Industry standards

Typically, business brokers charge around 10%-15% of the business’s sale price, although sellers can negotiate in advance the commission fees they will be charged.

In addition to the commission paid at the closing, some brokers have fee structures, such as an “Engagement fee” paid upfront to secure the broker’s services.
Additional fees may be paid throughout the transaction depending on what kind of work the seller wants the business broker to perform. These fees can vary considerably based on the complexity of the sales transaction project.

Both buyers and sellers should discuss these fees before entering into agreements with their brokers, so you know exactly what to expect. Business broker commissions are not set by each state and are subject to private negotiation between the broker and client, and the commission is usually whatever the two sides agree upon.

A business broker commission is often based on what the customary fee or commission is in the broker’s home state.

Once you’ve paid your broker’s commission, consult with an accountant to see if you can get a tax deduction on the commission. Whether or not a broker’s commission is tax deductible depends on the type of commission you paid. For business owners, commissions are usually deductible as a necessary business expense.

How Can You be Sure To Get Value for the Commission?

One of the most important factors in deciding if the commission was worth it: the closing. If you’ve sold your business to a qualified buyer, if you’re exciting about the price you received, and feel the sales transaction went off without a hitch, it’s safe to say the commission was worth it.

Selling a business is demanding work and can become a major headache for an inexperienced seller, but having a professional business broker as the middlemen in this transaction will take a lot of the headaches out of the process. A business broker is a seasoned intermediary who navigates the path that a sale will take. Their role is invaluable to both sellers and buyers. Business brokers play a key role in ensuring there is a smooth transaction, as they handle tasks that include:

  • – Business Valuations
  • – Buyer Analysis
  • – Analyzing financial options
  • – Structuring deals to satisfy all parties
  • – Weighing financing terms and contingencies
  • – Devising and launching marketing strategies
  • – Protecting the seller’s confidentiality
  • – Choreographing meetings between sellers and buyers
  • – Prequalifying potential buyers
  • – Reviewing and Analyzing Sales Offers
  • – Conducting Due Diligence

That’s a lot of tasks removed from the shoulders of the seller.

The Bottom Line: List Your Business With Website Closers

Choosing to sell your business and being represented by a professional business broker at Website Closers is a smart move. At Website Closers, we have represented thousands of companies in the digital space and sold every conceivable type of online company. Let us guide the sale of your business as well.

At Website Closers, we focus on maximizing deal value, and not just on closing the deal. At the same time, we have the highest close rate in the industry. Our clients know how much value we bring to the negotiating table. Today we have more than 155 customer reviews and countless video testimonials that verify our market successes.

When you’re ready to sell your technology, internet or digital business, Website Closer’s has a team of highly trained brokers who have experience successfully navigating the sale of all types of digital companies. Our team of highly trained brokers have the same digital backgrounds that our clients do, and they understand how to help people sell their company.

When it comes to paying fees or commissions, our process is 100% success based. That means we run the entire sales process from start to finish, and do not take a fee until we have closed your transaction. At Website Closers, we see no reason for upfront fees when we have a close rate that exceeds 90%.

Website Closers is the world’s largest tech and internet business brokerage. If you reach out to the professional business brokers at Website Closers, we start with a conversation, and get to you know, your business, and what your goals are. We’re ready to work with you to find the right buyer and get you a sale for top dollar. Contact us today and let’s get started.