Fees For Selling A Business

Your business has been built over many years and now you want to retire. How do you sell your business? What fees should you expect to be charged? Some Business Brokers charge an upfront and/or a retention fee. Others only charge a fee for the sale of a company. What will the fees for selling a business include?

What Are The Fees For Selling a Business

You can sell your business for a very low price and even receive 15% of the profits. If you are selling your business yourself, there will be certain expenses and fees that you don’t have to pay. You may lose more money if you sell your business directly without the help of a broker. Selling your business by yourself is more likely to result in a lower sale price.

Without the assistance of a business broker, however, it is very difficult to sell your business. Fees for selling a business may be required for business brokerage if you’re unable to successfully sell your company. The way that you sell a business will affect the cost. A business broker may charge fees to assist you in selling your business.

What Is The Average Business Broker Pricing When Selling A Business

Some business brokers only specialize in selling specific businesses. Cost of selling your company will depend on the size and type of the broker. According to IBBA, the typical business broker fee and commission range from 10% up to 15% of the sale price.

A business broker’s average commission rate is about 12% but that amount varies greatly based on location, experience, and specialization according to BizBuySell. The fees charged by a broker can be similar so you need to consider other costs. The business broker will determine the fees for selling a business that you have to pay and how much.

The fees for business brokers vary depending on how much work is done and the type of business that the broker sells. A business broker fee covers expenses, administrative assistance, valuation expenses, research costs, inspections, marketing, digital marketing and a myriad of other services necessary for business sales.

Upfront Fee VS. Post-Sale Fee for Business Brokers

There are many ways that business brokers can charge their clients for their services. The fees for selling a business takes two main routes include an upfront fee or a post-sale fees. There are some business brokerage companies that charge an upfront fee, and another fee when the company is sold. Others will charge you a fee only after your business has been sold.

These fees for selling a business can be based on a variety of reasons. Some are intended to help you and others to benefit brokers. Although fees are reasonable for rendered services, we will examine the motives behind different fees and mergers and acquisitions fees.

An advisor will prefer an upfront fee from the standpoint of selling the business. It shows that you’re serious about the sale of your company and helps to cover marketing expenses and time spent on it.

As a business owner, are you willing to pay a fee for a service that charges an upfront fee? This fee will not justify the time or money spent on your marketing efforts. If a brokerage company has a track record of successfully selling businesses, a commission should be paid at closing. This will cover marketing costs and the time spent in selling the business.

Additionally, business brokers are paid only a commission if a company is sold. This means that advisors will only accept assignments if they believe they can successfully sell the business. You don’t get to decide if advisors want to take on the task to collect the upfront fee or if they are confident they will be able to sell your company.

You will only pay a fee if a company is sold. This means that your goal for selling the business aligns with Business Brokers firms’ goals to get paid. Firms that sell larger businesses often charge upfront fees.

Higher potential commissions are worth the investment of time and money to obtain a higher commission. However, the reverse is true. Business Brokers companies that deal with larger deals usually have an upfront fee but Business Brokers that work on smaller transactions don’t typically charge upfront fees unless there is travel required or specific marketing requirements.

Many business brokers are willing to accept any company looking for a buyer and will usually charge an upfront fee. This fee covers the cost of listing your business as well as the marketing costs involved in selling it. The upfront fee will cover the costs of paperwork, transaction time and any additional expenses if the business is sold.

Mission Peak Brokers Does Not Take an Upfront Fee to Sell a Company

Mission Peak Brokers doesn’t charge any upfront fees. This is because we believe that you should be motivated to sell your company and not be compensated if it doesn’t succeed. Both buyers and sellers can go through a qualifying process.

Qualifying buyers and sellers and not having to pay an upfront fee result in both the buyer and seller being pleased with the transaction. We, as business brokers, are satisfied doing good work and earning a commission.

The Cost of Marketing Your Business For Sale

Selling a business is expensive which leads to the confidential overview being posted on the internet by business brokers. Potential buyers will then contact the broker via the business opportunity marketing ads.

Three types of potential buyers are most common: Buyers who are individual, Private equity investors and strategic owners of companies that operate in the same business or similar businesses and are looking for ways to grow.

There are three main ways you can market your business. Collecting a list to be contacted by potential buyers is a proactive way of doing so, Advertise the overview document online and on social media and reaching out to potential buyers who are in the Business Brokers company’s database. 

Ending the Sale of Your Business and Paying What is Owed 

After the transaction is completed, the fees for selling a business will be charged to you. The fees for selling a business is based upon the sale price of your business.

Our experience includes selling Liquor Stores, Restaurants, Gas Stations and SBA Loans. Check out our video channel and Mission Peak Brokers blog for more information about how we sell businesses.

To schedule a confidential consultation with us to discuss your needs and determine whether we are able to help, please complete our Seller Contact form. Feel free to contact us via telephone or email us.. We hope to hear from you soon.