Business brokers in San Diego are known to speed up the process of selling a business. They will help you get the business ready for the sale, help market it and handle the negotiations among other things. However, before you find someone who can do that for you, you have to be very carefully when searching the market for the right business broker in San Diego to work with. You probably have heard this before but not every promising service provider out there has your best interest at heart. The case is the same when it comes to business brokers
If you are thinking about selling your business and are considering using a business broker in San Diego, you need to understand that not everything you see in press about business brokers and business transfer is true. Although there are many excellent brokers in San Diego, there is also a good number of them who want to feed on your naivety. There are certain practices that can cause you to lose sleep or cost you a lot of money. One of them is the use of the Rat Trap in the contract.
What is the Rat Trap?
This is a very sneaky practice used by business brokers with ill intent. Unless you are very careful, you will never notice this trap until it is already too late. Many people have found themselves in this trap and it has cost them a lot of sleep and money.
How it works
The first stage is where the business broker in San Diego signs you up but with no expectations of helping you sell the business. The objective of the broker is to make you sign the contract. To make you do this, he will do everything possible to entice you. He will wine and dine with you until you feel important. The broker will flatter you with great business valuation figures and giving you reasons why he will be able to sell at that high price. He creates the impression of a lottery jackpot which will subsequently cause you to sign up.
The contract you sign will state that the San Diego business broker’s commission will be payable in full on certain conditions that may arise during the sale. What most people fail to do is to examine this clause more keenly.
With the Rat Trap, the conditions in which the full commission will be payable are many and usually trivial. For example, transferring some of your shares to your spouse may trigger the commission clause. What is even more painful is that the commission is payable in full. Many clients have ended up paying the commission for no reason just because they made very minor changes in the running of their business. The early termination of the contract will also trigger the commission clause.
Business brokers in San Diego who use this strategy have no interest in selling your business. They just sit back and wait until you do something that will trigger the commission clause. The only solution to this is to always read and understand the contract completely before signing it.