Should I Pay Upfront Fees to Sell My Business | Pacific Business Sales

Should I Pay Upfront Fees to Sell My Business?

Category: Business Valuation Mergers & Acquisitions Selling Your Business 

The short answer is NO!  At Pacific Business Sales we do not charge any upfront fees on transactions less than $25 million in revenue.  We prepare a  comprehensive free Market Value Analysis for each of our prospective clients before we list the business for sale.  We also prepare a comprehensive Confidential Information Memorandum (CIM) for each business we represent. We have spent time developing a marketing and selling process that works in deriving the highest value for your business.  These are the initial steps in selling your business.  

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Most Business Brokers do not charge upfront fees to sell small to midsize businesses up to $25 million in revenue, however, some will charge an upfront fee for a business valuation or marketing fee.  When considering the sale of your business and the Business Broker to represent you make sure you ask about upfront fees and if they charge for their Market Value Analysis or any other fees upfront. These upfront fees charged by some Business Brokers are paid by you regardless of whether they sell your business or not and are in addition to their commission.  

On larger transactions for companies with over $25 million annual sales, it is more common for the Broker or M&A firm to charge an upfront fee for a business valuation and preparation of the Offering Memorandum.  

Generally speaking, you should not pay any upfront fees for the sale of your small to midsize business.   Our commission is paid at the close of escrow from the Seller’s proceeds.  

What Fees and Costs are Involved in the Sale of a Business 

  1. Broker Commission at closing 
  2. Escrow fees split with Buyer
  3. Your advisors (CPA and attorney if used)
  4. Pay off business liabilities at closing (as specified in the purchase agreement)
  5. Federal and State taxes (paid on next tax return, review this with your tax advisor or ask to speak with our Tax Strategy CPA)

If you are considering the sale of your business contact us for a free consultation and Market Value Assessment. 

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