If you want to profitably sell your business, hire an experienced business broker. Experience in trading in the stock market, connections with lawyers, accountants and related specialists when selling or buying a trademark will be an invaluable addition to the broker’s arsenal and will provide his clients with a greater choice of options for making a profit.
The business broker will receive a commission as compensation for his services. The amount of the broker fee for selling a business and its purchase is the same, but the form of payment can be either hourly or monthly.
Who pays the business broker fee?
Payment for broker services can be made through the bank details specified in the broker’s legal address. Also, the broker be paid in the following way:
- Percentage of the transaction profit. A relatively rare method of paying a business broker, which makes sense when working with small and medium-sized businesses. The final receipt of the transaction is small in amount, so the broker’s commission will be low. In this case, specialists have the courage to offer the company partnership terms with payment of all business costs in the form of a percentage of the profit from the sale or acquisition of the business;
- Shares. When trading on the stock market, part of the profit can be allocated to the business broker in the form of a block of shares of the client company or beneficiary. In this form, the profit goes to the broker’s special account in the financial system of the company itself, and he becomes its investor. Most often, the company’s shares will be included in the specialist’s professional portfolio and he will try to independently extract profit from the shares, without being responsible to the client company;
- Cash. A rare way to pay for broker services these days, due to the development of online banking and increasing the comfort of user transactions at the level of virtual commerce. Payment for broker services in cash or in the form of a bank check may be necessary if third parties or sessional specialists are involved – lawyers or accountants.
Finding a qualified business broker is easy – there are thousands of websites of trading companies on the Internet, and on social networks there are many options for working with private entrepreneurs. An online business broker (for example, Website Closers) is a successful and reliable method of making a profit from any situation, be it purchasing a franchise or selling your own company.
Typical business broker commission aspects
A business broker’s commission has a fairly flexible mechanism. The payout size varies depending on the transaction amount, and funds can also be paid to the broker’s account daily or weekly. All nuances of the financial side of the transaction must be discussed in advance with the client.
Before entering into an agreement with a business broker, you should draw up a clear business plan. Working together on a business plan will not take more than a few days. The process should include analysts, financiers, lawyers and other specialists responsible for certain clauses of the agreement, for example, on the acquisition or sale of a business. Acts of merger of companies can be very complex in terms of document flow, and a standard business plan for the purchase and sale will be an excellent help for the foundation of a successful deal.
What do business brokers charge to sell a business?
The process of paying a commission to a broker when selling a trademark is quite quick and simple. The transaction contract will indicate the broker, his legal address and bank account for payment of commissions. Their size, most often, is 10-20% of the transaction amount and is fixed immediately after the agreement is signed by both parties.
Business broker commission may be paid in the form of a portion of the shares forming the basis of the transaction. In this case, the shares will be included in the broker’s portfolio and he will be able to use them for independent trading on the market. This practice is quite common in the market, and the use of stock quotes as the basis or part of the payment to a broker for his services and advice provided is a standard model of interaction in the world of finance.
Commission rate for selling a business constitutes one fifth of the transaction, on average. If the target profit amount is reached after the transaction is concluded, the broker is additionally paid a bonus for accurate analytics and successful advice for the client. When selling a business, attracting helpful leads and skillful bargaining, complemented by a strong presentation, can be the key to selling the company at the most reasonable price for both parties. It is also beneficial for a broker to carry out highly profitable, complex transactions – a long final receipt of a transaction means higher commissions for a specialist, and a closed large transaction promises a pleasant bonus cash.