Think about who is paying the commission on a sale; it is always the Purchaser: YOU!
Under the rules of the REAA (Real Estate Institute in New Zealand) a Business Broker is obligated to achieve the best price for the Vendor when we are engaged by the vendor; we list a business for sale, we magically find a buyer that wants to pay the best price and the vendor pays commission…..
Think different! The buyer asks the business broker for a business to buy (that suits their geographical area, income that needs to be replaced and the industry they wish to operate in) and the broker work in YOUR interest; to keep the price as low as possible, to negotiate conditions into YOUR favour and at a price that YOU are comfortable with…
The Catch… this also means that (as a purchaser) YOU are responsible for paying the commission. However you will find that the fees paid are negotiated in the purchase price of the business. Because we negotiate on your behalf, you will find that we can save you thousands of dollars!
If you, the Purchaser, are committed to buy a business you are better of signing an agreement between you and the broker (Buyers’ Mandate) so the Business Broker will make the deal work for you! This means that they will work as hard as possible to keep the price of the business DOWN…
Benefits of engaging a business broker
We understand that buying a business can be frustrating; you compete with other buyers, you don’t want to spend too much, it is time consuming…. BUT, here are the benefits to you engaging a Business Broker that works for you:
- Keep the price down
- Keep the commission down
- You don’t waste hours finding the right business
- You set the criteria, therefore…
- You purchase a business you actually want (not what is available)
So get focused, get an understanding of the process of buying a business (call me if you need help) and get good advisors around you (at least an accountant that understands the industry and a solicitor that has experience with commercial transactions. If you don’t have trusted advisors, we could recommend a selection of accountants, solicitors and other useful contacts to help you.
There are some basic criteria a Business Broker will want to know before signing a mandate;
- What industry and/or Business Category do you want to buy?
- What geographical area do you want to buy?
- What should be the ROI (Return on Investment) or Income that you try to replace?
- We understand that the budget depends on the ROI but we need to know what the bank is willing to lend you in order to qualify a business opportunity. Therefore we may ask you for the amount of equity in your properties and/or other ways you’d fund the purchase. Please don’t be offended by some personal questions we may ask you to be able to share appropriate opportunities to you.
Happy Hunting…. or we can hunt for you!
FREE LINK Northland downloads:
- FREE Download; Must-Have GUIDE to a successful Restaurant Business!
- FREE Download; Buying a Business
- FREE Download: Buying a Franchise
- FREE Download: Buying a MOTEL/Accommodation Business