Fair Payment To A Business Broker

Fair Payment to a Business Broker

by North American Alliance of Business Brokers

www.naabbonline.com

A good business broker earns their fee through expertise, hard work, networking and sales. They are experts at getting you to close. Reputable business brokers also limit the number of business for sale listings that they take so the fee they earn is well deserved for the time and dedication they put into it.

Each individual business broker has their own fee schedule. Most business brokers charge from 10-15% up to a certain value (contact us for our fee) then decrease this % as the asking price rises.

BEFORE agreeing to this fee – make sure that the broker has outlined for you exactly what they will be doing for you and should include…

  1. Determination of a Market Value for Listing
  2. The listing
  3. Buyer Marketing
  4. Qualify Buyers
  5. Get Qualified Buyers under Confidentiality
  6. Full Disclosure to Qualified Buyers
  7. The Tour with the Qualified Buyer the Business Broker and You
  8. The Business Financial Review to the Qualified Buyer
  9. Due Diligence – Getting Updated Info for Qualified Buyer
  10. The Offer
  11. Offer Negotiations
  12. Accepted Offer
  13. Due Diligence Making Sure All Contingencies Are Met
  14. Due Diligence Making Sure Financing Is In Place
  15. Other Due Diligence Making like Lease or Real Estate
  16. The Closing and Dispersal of Funds

In addition, some business brokers charge a retainer though we do not encourage it. Retainers -versus- No Retainers charged by business brokers – what’s better? Really there is no right or wrong answer when it comes to retainer or “listing fees”. We do not recommend these fees in a normal transaction process though may be used by some brokers in higher value deals.  BUT, we also do not necessarily think that retainers are wrong or unethical.

A Retainer or Listing Fee charged by business brokers should only be used and documented for expenses and services rendered. A retainer should not be used as a revenue source for the business brokers. UNFORTUNATELY, most business brokers charging retainer or listing fees use this fee as their primary source of revenue – this is wrong!

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