You have been working most of your life and now wish to retire.
What would one do in such a situation? Do you simply pay severance pay and close up the business? This would not sit well with your employees. Then there is the matter of selling any equipment you many have in the business. The best option for you would be to sell your business to a new owner.
How would you go about doing this though? It is not an easy task, and you do not want to spend your time searching for buyers. This is where hiring a business broker would come in handy.
Business Brokers are the professionals who assist in selling and buying of businesses. The main role of these brokers is to act as an intermediary between the buyer and seller. These brokers help individuals in search to buy existing business, to find the deal that fits the set parameters as such as industry, size, and location.
Few specialized business brokerage firms provide assistance to entrepreneurs, to set up or sell their business to other companies. These brokers evaluate the company, promote them for sale. They negotiate with the potential buyers, smooth the process with diligence and assist the sale.
Some states issue license to business brokers, whereas some do not. If a broker works on an hourly basis, then license is not required. Some states have made license mandatory, even if a broker merely gives a piece of advice to its clients.
Brokers charge specific fees for the service rendered. These fees are commissions. Commissions are given to the broker after the settlement of the transaction. The standard commission in many states is 10% – 12% of the settlement amount. Commissions are often negotiable and included in the contract.
A business broker usually bears the advertisement expense, which is compensated for later, from the commission received. Any commissions the broker receives or will receive should be notified to all concerned parties.