The term broker is used in many industries but what is a business broker? A business broker, frequently also called a business advisor, business intermediary or business transfer agent, is an individual who acts as a cushion between someone selling a business and the individual buying that business. Most frequently, a business broker is used to conduct all aspects and stages of a business sale, but a broker can sometimes be hired to assist with just a few select steps when an owner is selling a business. These stages would include: preparing a business for sale before it goes to market, conducting a valuation on the business and establishing a sales price, marketing and advertising the business for sale, screening interested buyers, facilitating the due diligence process, negotiating the sale, and closing the deal which includes preparing all the necessary closing documents. It is customary for business broker to charge between eight and twelve percent of the final purchase price in commission.
Although American Fortune does not support it, a business broker can also act as the business agent representing both sides of a business deal (also know as being the “dual agency”). American Fortune does not recommend this due to the broker’s position in such an arrangement. Yes, a business broker will tell you that they can remain impartial and will have the best interests of everyone in mind, but brokers are human beings trying to make a living. Even if a broker has every intention of keeping their word, the possibility of them making direct or inadvertent statements that could adversely affect the deal for either party is too great. Think about it, what could be a vantage point for the seller will hinder the position of the buyer. It’s a dangerous game of tug rope. American Fortune strongly advises each party hiring their own business broker.
In addition to proving assistance for selling a business,a business broker frequently also may offer valuation services to help businesses determine an accurate present value of their business, they assist with the preparation of a business for growth and also lead businesses through the process of exit planning.
Unfortunately, the business sale and acquisition industry is lightly regulated. In most states, there is little-to-no licensing or training required for someone to open up a business broker business. A few states, like California and Florida do require a business broker to at least have their real estate license but nothing stricter is required. So how do you know you are working with a qualified professional? American Fortune recommends that owners look for a business broker that has at least:
An MBA; or at least experience with business accounting and finance
- Experience. Ask for a list of references and follow-up with them
- Integrity. Is this someone I would trust with my family and my retirement plans?
- Credentials. Certified Business Intermediary (CBI) are two credible certifications.
SOLO Sale, a subsidiary of American Fortune Mergers & Acquisitions, is a consulting firm for business owners wishing to sell their business. Instead of offering their business advisor services as a comprehensive package – that can cost owners up to ten to twelve percent of their selling price – American Fortune offers their advisory services a la carte. This gives owner control over the sale of their business and saves them money by empowering them to select only the advisory services they need in order to successfully sell their business. To learn more, visit: www.sellmyusbusiness.com.
Why pay 10-12% commissions to business brokers on the sale price of your business. Contact American Fortune and experience low prices and superior expertise and support, click here.
Clients utilized American Fortune to sell their businesses in the following areas of the USA: Columbus Ohio, Atlanta Georgia, Lexington Kentucky, Bowling Green Kentucky, Nashville Tennessee, Memphis Tennessee, Cincinnati Ohio, Dayton Ohio,Toledo Ohio, Los Angeles, Cleveland Ohio, Pittsburgh Pennsylvania, Baltimore, Maryland, Indianapolis Indiana, Chicago Illinois, Detroit Michigan, Flint Michigan, Tampa Florida, St. Louis Missouri, Kansas City Kansas, Des Moines Iowa, Minneapolis Minnesota, Louisville Kentucky, Oklahoma City, Oklahoma, Dallas Texas, Fort Worth Texas, Denver Colorado, San Francisco California, Salt Lake City Utah, Phoenix Arizona, Lexington Kentucky, Los Angeles California, San Diego California. Our main offices are located in Los Angeles California, Louisville Kentucky and Detroit Michigan.