Selling your Small Business on a Budget
If you operate a small business and are looking to sell on a budget - it is possible! When your first deciding how to sell your business and whether to sell privately or engage with a business broker you will notice the costs involved. Some small business owners are shocked when they approach a business broker to find there is an initial upfront fee of $15,000 just to advertise the business for sale; there is also a sales commission if a successful buyer is found. This commission may be an additional $10,000 - $15,000 (approx.). These figures are just an estimate based on stories from small businesses, you should speak with a few business brokers to asses their services. These fees will have a big impact on small business owners, especially if you are trying to sell a $60,000 business - nearly half of that may be lost in brokerage fees!
There are some business brokers, who structure their pricing and commission to suit small business and their budget. But you will find most business brokers prefer to work with larger businesses (e.g. $150,000 plus) as the work required is similar and they have a better return on commission. This doesn’t mean a business broker wont assist you in selling your small business, you just need to realize the costs involved.
When it comes to selling your small business on a budget you have a couple options:
1. Sell your business privately. There are packages such as Bsale's value plus that can get your business advertised for sale on 6 websites for around $599 for 12 months (prices as at Aug 15, 2013). This will give your business sale exposure and allow interested buyers to contact you.
2. Engage a low cost business broker. There are some business brokers who will advertise your business for sale and negotiate on your behalf. But remember the saying "you get what you pay for" if the broker isn’t charging advertising and only working on a low commission basis, there is little incentive for them to work hard for your sale. If you have a small business and want to engage a broker, try having an open agreement so you can also advertise and sell the business yourself or have multiple brokers working on the sale.
I hope this information assists you in selling your small business on a budget! You don’t want to get caught out paying big fee's when your business is not valued high enough to warrant the cost. Remember to always consult your accountant and solicitor when selling your actual business.