How many professions do you know of that are expected to cover expenses upfront with no guarantee that they will be repaid?
For inexplicable reasons (other than as a marketing ploy perhaps) there are some that have an expectation that the Selling of a Business by a Broker means all advertising fees to do so are to be covered by the Broker, for example. That is, if a Business Owner wants their business advertised for sale, then the Broker should pay for the privilege. The argument justifying this is that these expenses will be recouped once the Business is Sold.
But here’s the thing, a Broker can’t control the process of the sale nor the decision making capability of either the Buyer or the Seller. Some of these transactions take some time to get over the line, if it all. Some do not sell.
With so many factors affecting a Business Sale transaction, of which a Broker only plays a small part, to expect anyone else other than the Seller to cover the expenses of trying to sell their own business is just plain wrong.
No seriously, think about it?
How is that smart policy? if the Broker was in complete control of all parts and parties then so be it. If the Broker knew that the expenses were guaranteed to be collected at settlement, then so be it. But settlement can’t ever be guaranteed obviously so how is it smart to think that all will just work out in the end? No worries!
Hope is not a Strategy!
But if hope is the only strategy a Broker has got to work with, one could go broke very quickly…
A Broker is definitely part of the “A” team for a well-executed Sale.
Other members of the “A” team are your accountant, your lawyer, your financial planner, your estate planner etc…
Would you seriously ask any of them to cover your fees for you to sell your business?