Business Brokers, sometimes called Business Agents, are licensed and highly trained professionals who act as intermediaries to facilitate the sale of small and medium sized privately held businesses.
The Business Broker is engaged by a business seller to represent them as an agent and to present their business to the market for sale.
A properly qualified and experienced business broker can help you price, package and effectively promote your business for sale to suitable business buyers. Typically, a business broker will offer you an opinion of value for your business (or an estimated selling price) and advertise the sale of the business without disclosing its identity.
Business Brokers list your business for sale on a business sales authority. Legislatively, to act as your business broker or agent, they must have a sales authority in all Australian States. After listing and advertising your business, the Business Broker handles the potential buyer’s enquiries and discussions and they pre-arrange and carry out inspections of the business by potential purchasers. They then negotiate the sale and oversee the whole sale process to completion, liaising with your accountant through the due-diligence process and with your solicitor through the legal process.
A Business Broker will charge a percentage of the final sale price as a fee or commission for their work. In some instances the Broker may charge a set fee. The business seller generally only pays the commission at time of settlement. In addition to the sales commission, a Business Broker will generally charge a listing or engagement fee at the time a business is listed for sale. This listing fee is an up-front fee and is generally very reasonable. Beware of a broker that requires many thousands of dollars as a listing fee.
Always use a member of the Australian Institute of Business Brokers (AIBB) when choosing a Business Broker to represent you. They are specifically trained professionals who have the knowledge and experience to properly value businesses and are experienced in the negotiation of the sale of businesses. They also understand the sensitivity and complexity of the business sales process.