Are business broker fees negotiable? If so, how would I negotiate it?
In some cases, our clients prefer a consulting arrangement in which we charge per hour for our services. This is a good option for the business owner that may not need our full range of services, and would need our help on a limited basis and possibly for a limited time.
Greg points out that the type and quality of services provided vary greatly from one broker to another. And, the size and types of businesses represented by a broker vary. It is critical that the business owner selects a broker with the experience and expertise to represent their size and type of business.
The business must be marketed by a broker in a manner such that the business will stand out as a good acquisition candidate with buyers who are looking at other similar businesses for sale. The business owner must be prepared to pay a reasonable fee to engage with the right broker that will provide the necessary services to ensure the best possible result in the sale of the business.
Greg explains that fees are negotiable in some cases. The best way to negotiate is to get proposals from at least three reputable brokers that can meet your needs. If a broker knows they are competing against other strong brokers for the contract to represent the business, they may be willing to reduce their fees for certain services.
For larger businesses, top business brokers will typically provide a custom proposal for their services. The business owner needs to have a clear understanding from a broker in terms of the type and quality of services they will receive in the contract. The type and quality of services must be at a level such that the business will be marketed by a broker in a manner that will make the business stand out against other similar businesses on the market. Negotiating the broker contract is as much about finding the right broker providing the right services as it is about fees.
Greg describes that the broker’s fees are typically based on the size of the business, and services and time investment that will be required to sell the business.
Services typically include a business valuation, assisting the business owner in getting prepared to sell the business, developing and implementing a marketing strategy and the materials that will be used to market the business, meeting and negotiating with buyers, and working with a buyer through due diligence, the contract process and close of the sale.
The services and time investment required to sell a business varies greatly depending on the business and challenges that might be unique to selling a particular business. The broker should explain in detail what they anticipate will be involved in the sale process and the time investment that will be required by the broker and business owner.
And, the broker should use a strategy to identify and attract the best possible buyers for the business
- Collect operational and financial details on the business required for a business valuation and to prepare marketing documents
And, the broker should use a strategy to identify and attract the best possible buyers for the business
- Possible financing options for the likely buyer
And, the broker should use a strategy to identify and attract the best possible buyers for the business
- Determine if the business is “Financeable” by a financial institution
And, the broker should use a strategy to identify https://rapidloan.net/payday-loans-nm/ and attract the best possible buyers for the business
- Public Advertising such as business listing websites, business publications, periodicals, trade journals, etc… that will provide exposure to buyer prospects
