When it comes to the question “how much does it cost to sell a small business?”, the answer is not simple. The cost can vary widely depending on the size and complexity of the transaction, the attorney’s involvement, and the fees charged by the business broker. While attorney fees often range from $7,500 to $50,000+, the most common fee business brokers will charge is a success fee, typically between 5%-15% of the total sale price. For smaller transactions, commissions generally range between 10 and 12 percent of the purchase price or some other fixed number agreed to by the seller and the broker. On the other hand, advisory fees typically run between $40,000 and $100,000, again depending on the size and complexity of the sale. For example, if your business is worth $5 million, you can expect to pay upwards of 8 to 12%, while if your business has a $50 million value, the fee could be much higher. At Atlanta Businesses, our broker commission is typically 10% of the sale price of the business, and there may also be upfront fees required to value, market and close the transaction.

How Much Does It Cost to Sell a Small Business?

When selling a small business, costs can vary widely depending on several factors. Attorney fees can range from $7,500 to $50,000+, and the most common fee that business brokers will charge is a success fee, typically between 5%-15% of the total sale price. On smaller transactions, commissions typically range between 10 and 12 percent of the purchase price. Advisory fees usually run between $40,000 and $100,000, depending on the size and complexity of the sale. For example, a business with a $5 million value may cost upwards of 8 to 12%, while for a business with a $50 million value, the fee could be much higher. At Atlanta Businesses, our broker commission is typically 10% of the sale price of the business, and there may also be upfront fees required to value, market and close the transaction.

Conclusion

The cost of selling a small business is not a simple answer, as it depends on many factors, including attorney fees, business broker fees, commission fees, and more. The best way to determine the cost of selling your small business is to consult with a knowledgeable business broker. Atlanta Businesses provides experienced professional business brokers who can help guide you through the process, and answer any questions you may have about selling your business. For more information, visit atlantabusinesses.com.

What is the process for determining the selling price of a small business?

To calculate the worth of the business, begin by summing the value of its assets, including all of its equipment and inventory. Then subtract any debts or liabilities to get the value of the business’s balance sheet, which is a starting point for determining the business’s worth.

What is the appropriate price to sell my small business?

The likely selling price of a business is usually two to four times their Seller’s Discretionary Earnings (SDE). Most businesses are expected to be sold within the range of two to three times SDE. Therefore, if the annual cash flow for the business is $200,000, the sale price would likely be between $400,000 and $600,000.

What level of difficulty is associated with selling a small business?

Disposing of a small business entails a lot of considerations and can necessitate enlisting the services of a broker, accountant, or lawyer. The amount of money you make from the sale will be determined by the purpose of the sale, when it is done, the company’s operational success, and the way it is organized.

How does one go about selling a business?

This article outlines several of the elements to take into account during all four steps of selling a business in California: preparation, negotiation, due diligence, and documentation.