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Link to FAQ Index Page

FAQs about Listing Agreements and Fees

FAQs About Listing Agreements and Fees

 


How much do you charge to sell my business? How and when are you paid for business brokerage services?

We are paid when you are paid – at closing. Our Success Fee is 10% of the total selling price of the business. At closing, an escrow agent is utilized to handle the receipt and disbursement of the buyer’s funds used to acquire the business. Our Success Fee is paid directly to us by the escrow agent handling the closing of the transaction.

 


Can I engage Biz Owner Advisors and still sell the business myself?

We have an exclusive “right to sell” listing agreement which means you cannot avoid paying us a fee if you sell the business yourself.  It’s not a good idea to do so anyway.  Maintaining confidentiality is of utmost importance when selling a business and when you are trying to sell it yourself, it is very likely you are endangering the risk of a confidentiality breach.  If you have a buyer in mind, it is something we can discuss, and we will approach that buyer while assuring confidentiality is maintained.

 


Is it necessary to have a sole and exclusive listing agreement?

We do not work with sellers on an “open listing” arrangement.  Again, it is a matter of maintaining confidentiality.  If you have more than one business brokerage firm working to sell a business, or you are trying to sell it yourself, the risk of a confidentiality breach is significant.

Simply stated, we do not accept listings that we believe are unlikely to sell.  When evaluating your business, we will be straight-up with you regarding its salability.  We do want to warn you that far too many (unscrupulous) business brokers will accept overpriced listings under the theory that the “market” will adjust the seller’s price expectations. That approach results in a very painful and very long selling process and for a variety of reasons, is usually unsuccessful.

When we accept a listing, we make a significant commitment to getting the business sold.

 


I know someone who has expressed interest in buying my business. Can I sell the business to that person after I sign your listing agreement?

Yes, but what you are really asking is “can I avoid a fee”?  The answer to that is no, but we may consider a slight reduction of the Success Fee.  If you have someone in mind that you believe might buy the business, for a variety of reasons, you are still better off letting us handle the transaction for you.  Depending on the specifics of the situation, we may consider a slight fee reduction.  Let’s discuss the specifics.

 


How long is your listing agreement period?

The initial term of our Listing Agreement is 9 months.  Unless terminated with 10 days of notice after the initial term, or otherwise amended, the agreement continues and is terminated 15 months after its Effective Date.

 


How long will it take to sell my business?

This may be the hardest question to answer because so much depends on the specific nature of the business being sold.  From the date an offer is accepted, it can easily require approximately 60 days to closing.  Some businesses have an acceptable offer in the first 30 days with the entire transaction closed in under 100 days.  For most it takes several months to receive an acceptable offer.  On average, it takes about 6 – 9 months from the signing of the listing agreement until closing.

Jim Stauder’s largest transaction, which sold for approximately $5,000,000, including earn-outs, took about 23 months to close.  The good news is the valuation kept increasing!

 


Does Biz Owner Advisors furnish standard forms and contract documents for buyers and sellers to use?

For the convenience of the seller and buyer, to aid in negotiations and to minimize the parties investment in advisors’ fees for document preparation, Biz Owner Advisors, LLC has engaged our attorney (the broker’s attorney) to develop a standard set of forms, agreements and contracts that can be used for most business sale transactions.  The broker’s attorney only  represents Biz Owner Advisors, LLC, and does not represent the seller or the buyer.  The forms and agreements have been developed with a goal of creating documents which are neutral and fair to both the seller and the buyer.

 


Why should I pay a higher fee to Biz Owner Advisors to sell my business than a real estate broker or agent might charge to sell my business?

The “going rate” or “Success Fee” for real estate transactions is less than that for business brokerage transactions.  Perhaps it’s not surprising that a real estate specialist has offered to sell your business for less than professional business brokerage firms charge for their services.  The old adage, you get what you pay for holds true in this instance.

We strongly recommend you read the Special Report: Insider Secrets to Selling Your Business – Business Broker Best Practices and Selection Criteria from the How to Plan and Sell a Business website.  It is a 12-page document providing insight into the world of business brokerage and provides great information on business broker selection criteria.  By doing so, you’ll gain a full understanding why, if you have a profitable business, you shouldn’t hire a real estate specialist to sell your business.

 

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If you have a question, send an email to jim@bizowneradvisors.com.

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FAQs about Business Exit Planning Considerations

FAQs about Business Brokers

FAQs about Business Valuation

FAQs about Confidentiality, Advertising and Disclosures

FAQs about Business Buyers

FAQs about the Business Sale Process

FAQs about Facility Leases and Owned Real Estate

FAQs about Assets Included in a Typical Business Sale

FAQs about Negotiating the Price Terms and Structure of Offers

FAQs about Due Diligence

FAQs about Seller Financing

FAQs about SBA Loans for Business Acquisitions

FAQs about the Business Sale Closing Process