Business Brokers, also known as Business Transfer agents, help buyers and sellers that are involved in private businesses in the process of buying and selling businesses. They calculate the actual value of a business and then advertise it for sale so that interested parties can contact them for further conversation. They handle the round of calls, interviews, discussions, and negotiations with the buyers without bothering the seller at every point. Sellers are informed by the brokers once the deal is finalized.
Business Brokers provide a full-fledged service to both the seller and buyer under an agreement that both the seller and the buyer have to sign in order to avail of the services provided by the broker. These brokers are also provided with a Business Broker License in order to make them work in a legal manner. If in case, they are found operating their work in an illegal manner such as offering a bribe to the buyer, asking for extra money from the seller, and many more.
Services provided by Business Brokers
- Help the seller in finalizing a particular selling price for the business.
- Prepare a marketing document or information memorandum of the company.
- Helps in searching for potential buyers.
- Coordinate in negotiations and also helps in managing the overall deal.
Fee charged by the Business Brokers
Business Brokers charge an upfront fee and it varies according to the different brokers. The upfront fee gets deducted from the commission they get at the time of deal closing. Some brokers do not charge anything for providing their services as they believe that there is no guarantee that the business will sell. So they often say that they will take their fees when the business will get successfully sold. Most brokers also work with Co-broker (broker handling other business) and share the commission with them after the deal gets closed.
Tips for hiring a Business Broker
One should follow the tips given below at the time of hiring a Business Broker for their business:
Conduct an interview round of different brokers
During the interview round, chat with them without their work experience, areas of expertise, connections which they have with other people in the industry, their rates.
Ask for references
Make sure that you ask for a reference as proof of their work record in order to decide whether they should be hired or not.
Review their resume and credentials
During the interview round, have a look at their resume in order to be sure how long they have been a broker, their professional certifications such as CBI which stands for Certified Business Intermediary), do they specialize in a particular industry, how many total transactions have they done.
Business Brokers have years of training and experience in selling and buying businesses starting from small to medium-sized businesses. Hence, can provide you a lot of guidance which proves to be of great help in saving money and time. As they are well connected with professionals such as accountants and many more, the brokers’ help in facilitating the sale.
