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Does a Business Broker Take a Cut of the Sale or Charge a Fee?

Posted by Alex Mylonas in

Are you thinking about partnering with someone to help you sell your business, but you are concerned about the potential cut that a business broker could take? The truth is that deciding to partner with a business broker is a very personal decision, but it’s one that should always be undertaken with the right level of care.

You have to also think about your overall purpose for choosing to partner with a business broker. If you are very busy running the day to day of your company or recognize that you might be able to increase your business valuation and likelihood of sale by beginning to transfer the leadership and ownership to key employees or creating the procedures to do so now, hiring a business broker means that your time is freed up from focusing on all of the elements of listing and negotiating the company for sale with perspective buyers.

Knowing that you have partnered with a business broker who has handled many other transactions like this before makes it simple and streamlined for you to do what you do best and focus on the priorities most important when selling your company.

Many different sellers don’t even understand the potential value of their business and often times might have already a valuation, but realize that they could have left money on the table by ignoring some of the tweaks and improvements they could have made to enhance their overall sale. Unfortunately, for business owners who are not realistic in terms of their pricing, the company will sit on the market and might never sell to any buyer at all.

Comparative prices are not always reliable in times of business transactions because there are factors that make each different company unique. There are add backs and expenses that you might not have considered when you are under the impression that your business doesn’t make much money.

However, you have worked really hard to build the business and should get all the potential benefits of listing that company for sale when it’s time to do so. Brokers will study all of the unique facets of your individual business before providing you with more information about their assessment of your unique value in the marketplace.

These aren’t the only benefits provided by partnering with the right business broker, however. From negotiation to identifying real buyers to giving you the proper exposure to the right network, a business broker can make this process much easier for you.

Negotiation is one of the most common areas for a business transaction to fall apart. It can be very emotional for a seller to be involved in the process of negotiation directly. These emotions can keep sellers and buyers from reaching deals that they need to achieve. If you receive a low ball offer to buy your business, for example, your instant reaction might be to decline it altogether or to argue with the prospective buyer. However, a business broker takes the heat off of you and enables you to make a rational decision about when an offer truly is fair. Brokers negotiate all the time and understand the common pitfalls that can happen in the negotiation process.

Negotiation makes sure that you haven’t just agreed on the issue of price, but also that each point in the deal has been properly addressed and agreed upon. Since brokers have plenty of experience in many different types of deal structures, they can often recommend scenarios that are beneficial to both the seller and the buyer.

You might not have even realized these issues prior to engaging in and working with a business broker. At Website Closers we leverage our extensive experience in the market place to ensure that you get all of the necessary benefits of partnering with an outside professional.