Your business selling cost is not the whole picture!
The first question I always get asked as a business broker is; “How much commission do you charge?” I don’t mind the question as it gives me an opportunity to show off my negotiation skills; you probably wouldn’t want a business broker that couldn’t even negotiate his own fee, imagine how he would negotiate the sale price of YOUR business?!
The first question could be about how many business I have sold, and what kind of businesses? Or how I can assure that I can sell their business or why I should be the one selling their business?
(To answer all of them; I sold over $8,500,000 worth of businesses ranging from $20,000 to over $2,000,000; totally about 18 with an average value of $502,352. I can comfortably say that there is no other Business Broking firm better equipped to do the job as well we can at Link Business Brokers….)
What Business owners fail to think of is the added value that an experienced business broker brings to the table; the marketing expertise; the database to get to the buyers; the negotiation skills; the safety net that they fall into if (god forbid) do make a mistake so we can lose our licence to practice business sales; the unbiased and unemotional (thereby balanced) approach; the time taken out to meet with potential buyers (most of them are a waste of time but have to be done); the phone calls outside of business hours to answer questions…… and we haven’t even got a contract.
Once we do have a signed Sale & Purchase Agreement there will be (re-)negotiating on different aspects of the contract, spending hours on end working through the Due Diligence, ensuring communications between solicitors/ accountants/ vendors and purchasers are running smooth and keeping the pressure on the Purchaser to ensure time frames are met, deposits are paid and that the deal will go unconditional and will actually settle.
In Business Sales, the smaller the transaction; the more work is involved. This is partly (or actually most likely) to do with the inexperience of the Vendor as well as the Purchaser. When it involves a smaller business (lunch bar, cafe, small retail franchise) we have to hold the hands of both parties a lot tighter because of the inexperience. When a person wants to part with $500,000 or more we can assume they have a lot more experience in business, therefore we don’t have to explain every detail.
But surely, the commission charged on a business sale shouldn’t be the biggest factor in deciding on who is going to sell your business?! Go with the one who YOU would buy a business from; the one with a proven track record; the one that takes the time to know you and your business and a person you like to communicate with, who tells you the truth and is open and honest (not matter what the outcome).
You will have to communicate with this broker every couple of weeks over a period of 6 months, sometimes longer.
In the sale process, the Business Broker that takes all the risk. If we don’t sell we don’t get paid either. It would have been all for nothing (hence I wouldn’t work on a General Agency Agreement basis).
There is no denying that we like big pay cheques. If you would want average results you might consider taking the advice from your friends and family. You will achieve an average result, if any result at all. At least, using a business broker, you are covered under the rules of the REAA as well as the Fair Trading Act. We are qualified to handle the transaction on your behalf, something that (for example) an accountant is not. He can charge you by the hour to prepare your accounts but if he would sell the business on your behalf (including negotiation with a potential purchaser, marketing your business for sale through database, advising on clauses to include in a contract) he could face a fine for unlicensed trading.
You deserve only the best while we are driven by result!
FREE LINK Northland downloads:
FREE Booklet outlining the sales process: Managing The Sale of Your Business
FREE Booklet outlining other options to an Exit Strategy
