Owners have a new resource for selling their very small business (typically, sales under $500,000) that can provide the business seller "the best of both worlds." Business sellers benefit from the professional assistance of a broker in valuing the business, re-casting financials, writing effective but confidential ad copy, receiving initial inquiries, getting NDAs and buyer profiles submitted, and then drafting the offer and contract, arranging for escrow, and facilitating due diligence.
However, for such small business sales, the meeting between the buyer and seller, the showing of the business, and the negotiation of price and terms can usually be handled by the business seller without the broker being present Particularly when it's a business selling for $200,000 or less. It always bothered me that the typical business brokering contract provides for a $15,000 minimum commission no matter how low the sale price. That's a lot for a seller to spend on a $40-, $60-, $100,000 sale.
To meet this market, we've introduced a "broker-assist" program. The seller of a business can pay a reasonable monthly fixed-fee commission to get all the preliminary work set up, cover the broker's advertising and response costs, and get periodic consulting-by-phone, and pay no additional commission on sale. In this context, "upfront fees" make sense, because sellers are getting real, quantifiable value, and dramatically reducing their cost of selling. For example, a business selling for $60,000, after three months of advertising, would typically pay the broker $15,000, or 25%; with our program, their cost would be approximately $1,500 to $2,500, depending on the program they choose.