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HOME 2018-05-29T20:54:12+00:00

The decision to buy or sell a business can be incredibly difficult and one that takes a lot of time and thoughtfulness to come to. However, even after you have made the decision to sell your own business or buy someone else’s the next thing that comes is figuring out how you are actually going to do that. A lot of people love going online for transactions like these, regardless of which side they are on, but for a lot of other people that “human touch” in the transaction is very important so they opt to go for a business broker. Whether the price tag of brokers is worth it or not isn’t for us to say, but what we can do is tell you about some of the pros and cons about them in the hopes that they will make your decision easier.

You have to pay a fee if you want to sell a business

To begin with, we are going to talk about the thing that is considered a con when you want to sell a business and that is the fact that every broker out there will take a fee. This fee can vary and it can be anywhere from 6 to 10% of the total selling price and they will consider that their commission. Now, this may not seem like a lot of money but what you need to keep in mind is that businesses don’t sell for cheap, so they will actually end up taking a pretty hefty amount. Because of this a lot of business owners that are selling their businesses also consider doing a FSBO sale, which stands for “For Sale By Owner” and see if they can manage to sell it before turning to a broker.

They are experts

No matter which way you turn it or how much you don’t want to pay that broker fee if you are seller, if there is one thing that you can’t take away from business brokers is that they really are experts in their field. They have the expertise when it comes to presenting the business to the buyer and they also have all of the tools that it takes to turn that presentation into an actual sale which is especially great if you are the seller. However, regardless of whether you are the buyer or the seller, a lot of the time people don’t really know what goes into a typical sale, so having a professional business broker next to you can really help make the sale run smoother.

They sometimes lower the prices

Now, depending on which side you are on this can be both a pro and a con. A lot of the time a broker is only interested in making the commission so they will actually go as far as to lower the price of the business just so they can make the sale happen faster. For example, if a broker takes the price down from 600.000 to 500.000 for them that is only a 6% difference out of 100.000 which is actually 6.000 that are going to be taken away from their commission, but those 100.000 less mean a 94.000 less for the seller. When you look at the number it immediately becomes obvious why it is a pro for some and a con for others. If you are a seller this is definitely a disadvantage, but if you are a buyer then you are getting the opportunity to buy a more expensive business for less.

Figuring out how you are going to sell or buy a business and which channels you are going to use is almost as important as making the decision whether you should buy or sell to begin with. Hopefully you found this article helpful and it has made it clearer for you whether working with a business broker is the way to go for you or not.

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