Business Brokers Have a Mixed Reputation. There are really great ones and all the rest. The right business broker can add substantial value to the buy/sell process. Irvine, California Business Attorney Assists Clients to Buy or Sell a Business.
Business brokers have a mixed reputation. Just like attorneys, there are really great ones and truly questionable characters. However, if a client is unskilled at selling or buying a business, the right business broker can add substantial value to the process. At the Gianesin Law Firm, we encourage our clients to first understand the business brokerage process and then engage a qualified business broker that meets their unique requirements. Bryan Gianesin, Business Attorney has participated in over 60 business buy/sell transactions. Contact us before your select a business broker or sign a brokerage agreement.
California Business Brokers Licensed by the Department of Real Estate
All California business brokers obtain their license from the California Department of Real Estate. Just like a real estate broker, business brokers are allowed to represent both seller and buyer in what is called a “dual agency” agreement. I’ll leave the issues of “dual agency” to a later blog.
Brokerage Commission Negotiable
The brokerage commission is nearly always paid by the business seller and represents approximately 10% of the purchase price. The commission is more flexible as the sale price of the business increases (much like higher priced homes for sale). Some business brokers will negotiate the commission, some will not.
Selling Broker Should Accept Offers From Represented Buyers
If you are selling a business, require your broker to review offers from buyers also represented by a broker and get it in writing! There is an unsavory practice by some business brokers where the selling broker refuses to even discuss the business sale with a buyer represented by another broker. A selling broker does this to keep 100% of the sales commission by finding a buyer who is not represented by a broker. Imagine how many potential qualified buyers will be lost if the selling broker is allowed to engage in this practice. A seller is going to pay the same commission regardless, so make certain that this issue in resolved in the brokerage agreement. The Gianesin Law Firm drafts this provision – and several other important provisions – when it reviews brokerage agreements for clients.
Get the Most Out of Your Business Brokerage Relationship
Maximize your business broker relationship by educating yourself before you negotiate and sign a brokerage agreement. The Gianesin Law Firm offers these and other tips at reasonable rates. Don’t sell or buy a business without the input of a qualified business attorney. Contact the Gianesin Law Firm, Bryan Gianesin, at (949) 287-5558 or at email@example.com to schedule a complimentary initial consultation. We also know some great business brokers.