There is a fair amount of ambiguity among sellers as it pertains to working with a business broker. We seek to answer some of the more common questions we receive from our clients to help you plan your exit strategy and choose the right business broker to facilitate the sale of your company.
What is The Purpose of a Dallas Business Broker?
A Dallas business broker is a professional who serves as an intermediary between buyers and sellers during a company sale. They help their client receive the best deal possible and work to ensure an efficient sales journey. They may represent either the seller or the buyer in a deal.
What are The Different Types of Business Brokers?
There are four primary types of Dallas business brokers. It is important to understand the type of business broker you need and ensure the broker you ultimately choose meets the necessary criteria. The four types are:
- Full-service business broker
- Limited-service business broker
- Real estate broker
- Online broker
In most cases, a full-service business broker in Dallas is recommended. They charge the highest commission, but they also are the best at ensuring you receive full value for your company. Additionally, a full-service broker makes the process much easier and less stressful for the buyer, handling most tasks for them. A limited-service broker may only offer certain services, such as a valuation and exit strategy planning; the seller may be on their own for the other stages of the sale.
A real estate broker usually charges the same rates as a business broker, but they are usually more inept when it comes to selling a business. If you are only selling commercial real estate and not your business, then a real estate broker may be recommended. Otherwise, they are typically not recommended. Lastly, an online broker may only use online methods to sell your company, and you may not even meet with them in person.
What are The Benefits of a Dallas Business Broker?
The quality of your business broker determines the extent of the benefit. If you choose an experienced Dallas business broker who helps you throughout the entirety of the sales journey, then you can expect the following benefits:
- Achieve a higher sale price
- Meet your non-financial goals for the sale
- Maintain the confidentiality of the sale
- Avoid long due diligence processes
- Enjoy the sales journey without all of the stress
Essentially, a qualified business broker simply makes the sales process easier and increases the chance of success. If you are like many owners, then your company is like a child. You should do all you can to ensure you have the right team in your corner before you begin the sales process.
What Does a Dallas Business Broker Do?
The services may vary depending on the type of business broker (see above). Generally, full-service business brokers in Dallas offer a multitude of services and assistance throughout the entirety of the sale process. Notably, the services they offer include:
- Business valuations
- Exit strategy planning
- Business sales (finding a buyer)
- Due diligence assistance
- Legal assistance (i.e. NDAs)
How Much Does a Dallas Business Broker Charge?
The payment amount and type depend largely on the type of business broker. There are two primary types of fees that a Dallas business broker may charge. These two types are:
- Upfront fees
- Success (commission) fees
An upfront fee is exactly how it sounds. It is a payment that you make to the broker before they begin providing services for you. Some brokers only charge upfront fees, although many who charge upfront fees also take a portion of the sale as well.
A success (commission) fee occurs when the broker only takes a percentage of the final sale price. In many cases, the seller does not pay until the deal is complete. This incentivizes the broker to work on your behalf and secure the best deal possible. Some brokers also charge valuation fees; these are payments you make for the business broker to provide a valuation.
Is a Dallas Business Broker Necessary?
You are not legally required to hire a business broker in Dallas. However, with that said, we strongly recommend working with one if you are selling your company. Otherwise, you may improperly price your company and not be able to find and negotiate with potential buyers. You are also more likely to experience frustration, setbacks, and time-consuming processes without the assistance of an experienced business broker.
What is The Difference Between a Sell-Side and Buy-Side Business Broker?
A sell-side business broker represents the seller in the translation. A buy-side business broker represents the buyer. Business brokers mainly work with sellers, although buyers can also benefit greatly by having their own broker who can find good investments. In many cases, the buyer and the seller may have their own broker in the same deal, and the brokers must work together to finalize the terms of the deal and ensure all goes smoothly with both parties getting what they want.
What is The Difference Between a Business Broker and a Real Estate Broker?
A business broker specializes in the sale of companies; a real estate broker specializes in the sale of real estate. With that said, there is some overlap. Many Dallas business brokers also have a real estate license, which helps ensure a smooth transition of real estate if it is included in the business sale.
On the other hand, many real estate brokers also offer business brokerage services. However, they do not have the same level of training and expertise as a business broker when it comes to selling a business. In short, you should choose a business broker if you are selling a company (with or without real estate); you should choose a real estate broker if you are only selling real estate that is not part of a business sale.
Need a Dallas Business Broker? Contact Sigma Mergers and Acquisitions Today
Are you searching for a qualified and experienced business broker in Dallas? If so, then Sigma Mergers and Acquisitions is here to help. We have decades of experience and have helped more than 600 business owners sell their company successfully. Contact us today to learn more and to receive a free, no-obligation business valuation.
Sigma Mergers & Acquisitions sells businesses valued between $1 million and $100 million. We have helped sell 600+ businesses over the past 20 years. We charge NO upfront fees ever, and you pay us only when we sell your business for a price that meets YOUR goals.