Business brokers San Diego work on commission. This means that you pay them a percentage of the total selling price. If your business sells for $1 million dollars and you had agreed on a commission of 5%, then the brokerage fee will be $50,000. The best thing about working with a broker is that you pay for results. If he doesn’t manage to sell your business within the contract period, you don’t have to pay him anything. All in all, it is important to note that the commission varies from one brokerage firm to another and depending on the location and type of business. There are also other things that impact the overall cost.
Typical fee
The common rate charged by business brokers San Diego varies from 5 to 10 percent. The commission is usually affected by sliding scales, size of business, special agreements, sale price, the industry and so much more. It is also good to note that the commission rate will be influenced by the services that are offered by the broker. For example, brokers with a great track record tend to charge higher commissions for their services. This is because they know that their services will increase the quality of the sale. Simply put, the type of activities that the broker undertakes to sell your business will have an impact on the price.
The best thing you can do when working with a broker is to negotiate a better fee. As aforementioned, the special agreements will affect the overall fee. A majority of business brokers San Diego will allow you to negotiate a better fee. Prior to getting into a contract with the broker, take the time to try and get a lower commission. Once the broker agrees on the lower commission, you should ask that everything be put in writing.
Upfront fee
One thing most people never consider when working with a business broker San Diego is that an upfront fee may be required. This is required by most brokers to take care of the initial costs. You need to remember that once you hire him, the broker will start marketing your business for sale, talk to prospective buyers, meet with purchasers, organize appointments, chase up buyers, help with the paperwork and communicate with solicitors. To shield themselves from the huge costs, most brokers will require that you pay a small upfront fee. Always steer clear of brokers who request for an upfront fee that is too high.
Although the service will cost you money, working with business brokers San Diego will save you a lot of time and money in the long run. The broker will remove the guesswork from the equation and ensure that everything runs smoothly and in the right way.