• Thu, Jun 25, 2020
  • Selling Your Business? Engage A Business Broker
  • With the COVID-19 pandemic, many business owners may be thinking that it time to sell their business. While some business owners may have built-in successors – next generation family members or internal employee candidates, many may need to go out to the general market to find a buyer. If this is the case, it is strongly advisable to hire a business broker.

    A business broker is an important ally for guiding an entrepreneur from valuation to marketing to ultimately closing on the transaction. A competent broker will do his best to negotiate for the highest price and best terms for the business, while keeping the other side at the table.

    Here is what is covered in a typical business brokerage listing:

    1. Sale terms – – what are the minimum sale terms that the broker must obtain?
    2. Percentage commission – – what is the percentage amount of the sale proceeds that the broker will be paid?
    3. Minimum commission – – regardless of the percentage, is there a minimum dollar amount the broker will be paid?
    4. Basis of commission – – on what basis is the commission to be calculated, e.g., all of the sale price regardless of the period of time over which the price will be paid?
    5. Timing of commission – – at what time is the commission due, e.g., all at closing?
    6. Exclusions – – are there any people or entities, e.g., employees, customers, competitors, that, if they purchase the business, no commission will be due?
    7. Obligations of the broker – – what exactly is the broker obligated to do, e.g., advertise in specific publications for a specific amount of time?
    8. Term – – how long does the agreement last? Can it be terminated under certain circumstances?
    9. Confidentiality – – what are the protections to avoid disclosure of confidential business information?
    10. Dispute – – what is the procedure if there is a dispute with the broker?

    For a link to the full article, click here

    Steve Niehaus, MBA, CBI
    [email protected]