If you’re selling your business, you may be wondering how much it’s going to cost you. The cost of selling a business depends on many factors, including the size and complexity of the business, the buyer’s market, and the service and assistance you need to complete the sale. This article will provide an overview of the costs involved in selling a business, including attorney and broker fees and other associated costs.

How Much Does It Cost to Sell a Business?

When selling a business, the cost of the transaction can range from $7,500 to $50,000+ for attorney fees, depending on the size and complexity of the business. For business brokers, the most common fee is a success fee, typically between 5%-15% of the total sale price. Advisory fees typically run between $40,000 and $100,000, depending on the size and complexity of the transaction. For smaller transactions, the commission generally ranges between 10 and 12 percent of the purchase price, or a fixed number agreed upon between the seller and the broker. For businesses with an enterprise value (sale price) of more than $1 million, the commission is usually 8 to 12%.

Other Costs to Consider

In addition to attorney and broker fees, there are other costs associated with selling a business. These include:

  • Closing costs. These may include filing fees, transfer taxes, escrow fees, and other costs related to the sale of a business.
  • Accounting fees. Professional accountants may be required to review financial documents for accuracy and completeness.
  • Taxes. Depending on the specific tax implications of the sale, the seller may be liable for taxes on the proceeds.
  • Marketing costs. There is a cost associated with marketing a business to potential buyers.
  • Lease transfer fees. If the business is located in a leased space, there may be additional costs associated with transferring the lease.

When selling a business, it’s important to have an accurate understanding of the costs involved. By knowing the costs upfront, you can ensure that you are properly prepared for the transaction.

Selling a business is a complex process. If you need help navigating the process, Atlantabusinesses.com is a great resource for answers to all your questions about selling a business and about business brokers.

What is the process for calculating the value of a business for sale?

To figure out the worth of the business, begin by totaling the value of all items the business owns, including all equipment and inventory. Subtract any debts or obligations that the business has. The sum of these calculations will be the value of the business’s balance sheet, which should provide a basic starting point to determine the business’s worth.

What is the appropriate price to ask for when selling my small business?

A business should usually be sold for two to four times their seller’s discretionary earnings (SDE). Most businesses fall within the 2 to 3 times SDE range. Therefore, if the yearly cash flow is $200,000, then the likely selling price will be between $400,000 and $600,000.

What person is responsible for covering the cost associated with selling a business?

Generally, the seller is responsible for paying the Broker’s fee. In the case that the buyer was introduced by a different brokerage, the commission will be shared by both the buy-side and the sell-side brokerage in equal parts.

How difficult is it to sell a business?

It may be possible to sell your business in a relatively short period of time, but it is likely to be a lengthy process. It is quite common for potential buyers to drop out or for deals to fail, so it is important to remain patient and focused to the very end.