When selling a business, you will need to plan your finances carefully to successfully facilitate the business sale process. By ringfencing necessary funds, you can paint an accurate image of your financial position after selling the business. In addition to earmarking funds to cover broker fees, you may decide to invest in the business before placing it on the open market. Settling outstanding liabilities and perfecting the image of your image can increase face value as assessed in your business valuation, and therefore attract higher offers.
A frequently asked question from business owners looking to sell a business is – how to sell my business for free. When appointing a business broker or business selling agent, you will need to understand their payment terms and avoid parties charging an extortionate upfront fee.
Common ways business brokers charge fees to sell a business include:
Commission fee – When appointing a business transfer agent, you will need to pay a commission fee, either upon signing up, after sale completion or a combination of the two through a retainer system.
The commission fee will typically range between 2 and 12% of the sale price, or they may charge a fixed sum, whichever is higher. Some business brokers may charge no upfront fee, so you can appoint them free of charge, however, be aware of additional costs, such as advertising fees
Advertising fee: Although business brokers may charge no upfront fee, you may be required to pay advertising fees to list your business up for sale, produce marketing collateral and promote your business to prospective buyers
Additional costs: As part of the business selling process, you will need to budget for legal fees, such as solicitors to administer the sale and lawyers to draft contracts and heads of terms agreements. You may also need to pay an accountant to bring your financial records up to date for a business valuation, and for the viewing of prospective buyers
Business brokers specialising in national business sales may vary in their approach when charging to sell a business compared to small business brokers based on specialisms, resources, and industry experience. If you are searching for a ‘business broker near me’, key decisions makers may also include price and demonstrable sales in your sector.