Business brokers in San Diego charge for their services in different ways. Some will give you a low fee in order to lure you in while others will charge a higher fee to show you they know what they are doing. The fee you get is usually based on different things such as the experience and reputation of the broker. Even so, even when you agree with the fee charged by the broker, you must refrain from paying an upfront fee. Below are some of the reasons why you should not.
Brokers get paid on commission
The first reason is because business brokers in San Diego are paid on commission. This means that you will never pay them a dime until they have closed the deal. All in all, before committing, it is imperative that you take time to ensure that you are getting the best deal. The first thing you need to do is to know the average cost of working with a business broker. This will help you know if you are being exploited or not. Second, you need to negotiate with the broker. Just because the asking fee is a commission of 10% does not mean it can’t be lower.
In addition to that, you have to read the contract carefully. There are so many brokers out there that use tricks to entrap their clients. For example, you may be unable to get out of a contract once you sign it. In other cases, clauses may be added that may cause you to pay them the commission even before they sell your business. Whenever possible, enlist the help of an attorney to help review the contract before you commit to it. You need also to make sure that there is a provision for you to get out of the contract.
Motivates them to work harder
Another reason why you should refrain from paying huge upfront fees to the business broker in San Diego is because paying him on commission motivates him to work harder for you. This is for the simple fact that you he will only be paid once he sells the business. The longer he takes to sell your business, the longer it will take for him to get paid.
Ensures they have confidence in you
Last but not least, the fact that the business broker in San Diego is willing to work on commission means that he has confidence he will be able to find the right buyer and close the deal. More often than not, when the broker asks you for a huge upfront payment, there is a good chance he has no confidence in selling your company. The case is the same when they request for a huge commission. Avoid such brokers.
When hiring business brokers in San Diego, you need to make sure that you are picking someone that you will be comfortable working with. If you don’t trust, how can you expect to work with him for the many months your business will be on the market?