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Business Brokers

The process ofselling orbuying a business can be complex. It often involves a lot of back and forth negotiations until both parties are happy with the price and terms of a deal. 

There are two options when it comes to buying or selling a business:

1. Go through the process yourself  
2. Hire a professional business broker 

While it’s possible to go it alone, you may find the process much longer, stressful and more difficult to negotiate a favourable offer. The other option is to hire a business broker. 

Business brokers are experts in sourcing great business opportunities. They can find business opportunities and potential buyers that tick all the boxes, prepare your business for sale, and negotiate the best price and sale agreement terms. 

The aim of this page is to help you decide if hiring a business broker is the right option, and send you in the right direction if you want to hire one.

What is a business broker?

Business brokers aid in the buying and selling of businesses or franchises, and mergers and acquisitions. They act as the middle-person of the sale transaction between buyers and sellers. Hiring a business broker is a bit like hiring a real estate agent, except they deal with business sales instead of properties. 

What does a business broker do?

For a business buyer, business broker services include:

• Consultation on what to buy, the process, as well as the legal and financial aspects
• Scouring the market for the best business to buy within your budget
• Approaching and negotiating with the seller on your behalf
• Connecting you with the right people such as an accountant or lawyer to help buy a business
• Assisting with the necessary paperwork to buy a business, as well as the contract of sale.

For a business seller, broker services include:

• Consultation on the current market, prices, financial and legal areas
• Helping to prepare your business for a sale
• Connecting you with the right professionals such as an accountant to help sell your business
• Appraising a fair value of your business
• Marketing your business for sale in a comprehensive campaign such as creating brochures, ads, online listings and others
• Reaching out to their wide network of contacts to find a genuine buyer
• Screening potential buyers to find serious ones
• Negotiating for you to get the best deal
• Helping you with the required paperwork to sell your business.

What is the difference between business brokers and business loan brokers? 

Business brokers and business loan brokers are middlemen, but the difference is the product they broker. Business brokers assist in starting a business, preparing your franchise or business for sale or buy a business, while business loan brokers discover the best business loans for you.

What are the benefits of hiring a business broker?

Some additional benefits of hiring a business broker include:

• A business broker is an objective third party without any emotional attachments which can cloud judgement. 
• Business brokers usually have a vast network of contacts which can make finding a well-matched buyer or seller for your business much easier. 
• They have extensive experience in business deals and can help you navigate a prolonged or complicated buying/selling process.
• You get to focus on running your business while your broker concentrates on selling your business at the best price in the timeframe you need.
• You can rely on their negotiation skills when hatching out a final contract with favourable terms.
• They can offer confidentiality if you prefer to remain anonymous in the initial stages of buying and selling.

How do I find a good business broker?

Before jumping into the checklist of what to look for in a good business broker, remember that the process of buying or selling a business can be lengthy. You will be working closely with your broker for six to 12 months under normal circumstances. It’s imperative that you choose someone you feel most comfortable working with for the long term. 

To find a good business broker, look for:

• Qualifications: Different states in Australia have different rules for licensing and registration.
• Experience and success rate:Pay attention to the number of deals they have done, the size of their portfolio, and the quality of businesses they have dealt with.
• Niche:Do they specialise in dealing with specific industries, business types or sizes?
• Services they offer:Check what they do and don't cover and their end-to-end process. Make sure you understand what you’re paying for.
• Decent reviews: Check reviews online including their website and public review platforms like Google Maps.
• Good references:Find past clients or search for word-of-mouth feedback.
• Their network: A wider reach means you can catch a bigger haul of buyers or sellers.
• Professionalism and character:Remember, this person will be representing you. They should be trustworthy, transparent and easy to communicate and work with. 
• Fees:Allocate for all expected expenses combined with a buffer amount for any teething issues along the way.

In addition, you will also need to review a business broker's license.

Which states require a business broker license? 

The business brokering industry in Australia is state-regulated. To review the state licensing requirements and check the latest updates visit the Australia Institute of Business Brokers’s (AIBB) website.

How much do business brokers charge?

Most business brokers charge a commission of 5-10% of a sale. Some brokers or companies may charge a flat rate or monthly fee instead, so make sure you read the fine print.

If you’re looking to sell or purchase a franchise, you’ll need the expertise of a franchise broker. 

What is a franchise broker?

Similar to a business broker, a franchise broker is a professional broker that specialises in the buying and selling of franchise businesses. Some business brokers may offer services for franchises and other types of businesses.

For buyers, they know all about what a good franchise opportunity looks like and can help you identify franchises that align with your goals. For sellers, they can cut through the noise and find high-intent prospective buyers.

How much do franchise brokers charge?

Franchise broker fees are typically on a commission basis ranging between 5-10% of a business sale price (the same as a business broker). 

Are you ready to hire a business or franchise broker? Simply tell us about your project and we’ll introduce you to the right professionals to help. If you’ve decided that being a private buyer or seller is a better option for you, you can also browse the latest offers for serviced packaged such as advertising and listings, business valuations, pre-screening and appraisal preparation.