On Deal Talk, we often hear from former business owners who have sold their companies or professionals who are dedicated to helping entrepreneurs sell their...
Frequently Asked Questions
How is your program different than using a normal full-commission broker?
Our program is very similar to using a full-commission broker; however, we do not physically show your business. Buyers often feel more comfortable and relaxed at a more casual meeting of just the buyer and seller. It is simple to show your business and does not require any specific expertise. You simply meet with the buyer and give them a tour of your business and answer their basic questions. If the buyer wants to make an offer on your business or has technical questions that you cannot answer, then pick up the phone and call us, and we can assist from there. We believe that most buyers actually prefer to talk with sellers directly, which can increase the chances of a successful sale. Additionally, do you think a buyer is going to trust someone whose entire compensation is based on a commission? If you were buying a business, would you trust someone whose entire fees were only paid if you bought the business?
How much can your program save me in fees and commissions?
Typical brokers charge 8% to 12% commission on a sale. On a $500,000 sale, broker fees can range from $40,000 to over $60,000. The average fees for our program range, on average, from 2% to 6% of the price of the business, or $5,000 to $25,000.
Can I cancel anytime?
Yes, you can sign up today and cancel tomorrow. We do not require long-term contracts. There are no penalties for canceling. Simply call or email us anytime you wish to cancel. Because we work on a fee-basis like other professionals such as attorneys and accountants, you have paid for the work that we have performed and you can terminate our services at any time. Commission-based brokers require an exclusive long-term contract as a means of protecting their commission. Because they are only paid at closing, and in order to recoup their investment of time spent selling your business, they require you to commit to a long-term contract.
Does this really work?
Yes. These are the exact same tools we have used to sell hundreds of businesses for many years. We consider our resources and processes to be superior to those of other brokers because we have a large dedicated team made up of specialists in each phase of the process while most business brokers work solo without even one assistant. We consider a team to be much more effective than an individual.
Is selling a business hard?
It can be. It depends how you go about it. Frankly, dealing with buyers can be time-consuming. With our program, however, you do not have to deal with tire kickers. Our program naturally weeds them out. It can also be hard negotiating with buyers; however, even if you have a broker, you will still have to be involved in this process.
What are the chances of selling my business?
A lot of people ask us this question. It depends on many factors. But the bottom line is that if your business is attractive, and you market it for sale and position it properly, then you have a very high chance of selling it. The key is to market it to the widest audience possible, position it in the best light possible, and to use a proven system. Many brokers quote statistics of closed deals; however, in our experience, this is often puffery and not independently verified by a third party. Statistics are very difficult to compile because of the long cycle time of selling a business. Additionally, statistics can be skewed by the broker’s selection process. For example, if a broker only selects businesses that are easier to sell, then their percentage of closed deals will be much higher. This does not mean they are a more skilled broker; it only means they are selective in their client selection.
Why are your fees lower than business brokers who work on a commission basis?
Because we are primarily fee-based, we are only compensated for the work that we do. With commission-based brokers, you will pay a high fee of 8-12% of the selling price of your business. Commission-based brokers charge such high fees to compensate for the typical 50-75% of transactions that do no close. Part of the commission you pay for selling your business is offsetting time the broker spent on other businesses that did not close. With Morgan & Westfield, you only pay for the time our team of highly trained specialists devotes to selling your business, not someone else’s. We do not have to charge high commissions to offset the transactions we do not close because we are compensated through our fee-based services. And because we do a higher volume than most other brokers, we have become efficient at what we do by developing systems for each phase in the process of selling a business. Our team of skilled specialists — including CPAs, attorneys, graphic designers and more — are able to accomplish the tasks involved in selling your business more efficiently, and can therefore charge a lower fee. Most brokers work unaided, without the support of a team. Additionally, brokers typically spend 50-80% of their time talking to buyers and showing your business. We have eliminated this step from our process, which allows us to pass the savings on to you. We sit in our office and focus 100% on accomplishing the most important tasks involved in selling your business. We do not have to waste time driving and getting stuck in rush hour traffic in order to be present at the initial buyer-seller meeting. We are only paid for providing value, not for clocking hours.
I haven’t been involved in many sales before, do I need experience?
Experience is helpful, but not necessary. We handle all technical aspects of the deal while you handle the simple process of showing pre-screened buyers your business. You can reach us on the phone anytime. We are glad to help. We are available during business hours by phone or email.
Why should we use your program?
Our program is easy to navigate and saves you both time and money when selling your business. Work with a professional firm whose practice is structured similar to other professional service providers, such as accountants and attorneys, and only pay for the services you select without having to sign a long-term contract. Our team will be there to provide you with support and guidance and answer any questions throughout the entire process of selling your business.
What do buyers think of your program?
Buyers love how streamlined our process is. Most traditional brokers still fax non-disclosure agreements, take days to respond to emails and prepare out-of-date business summaries. Our tools are state-of-the-art, and buyers simply love them. Again, we have made a large investment in our technology and have built a large team of support staff because we have structured our business model after other professional service firms, while most business brokers work solo in small offices with no support staff or technology.
Why did you start this program?
Sellers don’t want to pay the high fees that most brokers charge. Additionally, there is always mistrust when a broker’s entire compensation is commission-based. We keep our fees low because we do not travel and attend unnecessary meetings. The most time-consuming aspect of selling a business as a broker is attending meetings with the buyer. We feel this isn’t necessary; however, most brokers participate in these meetings in order to justify their high fees and to protect their commission. By cutting out the travel time and unnecessary meetings, we have been able to substantially reduce fees.
Why shouldn’t I just hire a real estate agent to sell my business?
Because a real estate agent is an expert in selling homes, not businesses. Why not hire your dentist or auto repair technician to sell your business? They might do it for a greatly reduced fee. But they are not experts in the process of selling a business. If they were, they wouldn’t charge less than the industry norm. It was very common for residential real estate agents to sell small retail businesses in the ’80s and ’90s; however, this trend is reversing as real estate agents are realizing that selling a business requires highly specialized knowledge in finance, law, negotiations, deal structure and dozens of other areas.
Do broker fees normally include closing fees and other fees paid to third parties?
No, the broker’s fee normally only compensates the broker. Any additional advisors you choose to consult will be paid for separately. For example, an attorney who may review the documents or an accountant. In the majority of transactions, fees paid to an escrow company are split between the parties, which is in addition to any broker fees or commission.
Why is the pricing different for each business?
Because the process is customized to the type of business, the industry and its size, the pricing of different businesses will vary. We also offer multiple fee-based services, which allows our clients to choose which options best suit their needs. Our level of involvement also affects the price. For example, some owners are comfortable with a verbal opinion of the value of their business, while others prefer a formal written report. Some owners have their attorney handle the closing while others use Morgan & Westfield for the closing. Each transaction is unique.
Can you guarantee that this will work?
No, we would be lying if we guaranteed that. Nothing can be guaranteed when selling your business.
Why should I use your program?
We save you time and money when selling your business. Our system is simple and easy to follow. You get access to the same tools and resources we use when charging commissions in excess of $100,000.
Why are your rates so low?
It’s easy. We sit in the office and focus 100% on doing the most important tasks. We do not have to drive and get stuck in rush hour traffic and be present at the initial buyer-seller meeting. We are only paid for providing value, not for clocking in hours. Because we do a higher volume than most other brokers, we have become very efficient at what we do and can therefore charge much lower rates. Additionally, we do not have to charge high commissions to offset the transactions we do not close because we are fee-based.
I have a buyer. I am going to wait to see what he does before I try your program.
Based on over ten years of statistics from successful brokers, over 95% of potential buyers do not end up buying a business. We see this situation time and time again: a seller is sure he has secured a buyer for the business only to have the sale fall through. You typically need to talk to over 30 buyers to sell a business! We can help you find serious buyers and weed out those who will just waste your time.
I have a small business, I don't have a big corporate business. Do I need a Business Summary?
Most buyers who are buying a $30,000 business often think and act like they are buying General Motors (This is a joke within the brokerage community.). Buyers who typically have $100,000 cash are often willing to invest up to half or three quarters of this into a business. For them, it represents 50-75% of their liquid net worth so it is a large investment for them. They take the same precautions (if not more) as someone who has $1,000,000 and is investing $500,000 into a business. Fifty thousand dollars is a lot of money to someone who only has a hundred thousand dollars. By investing time in preparing your business for sale and presenting it professionally, you greatly increase the chances of a successful sale.
Savvy buyers who are investing millions are often happy with a concise, one-page summary – because they know what they are looking for and are very experienced. These short, one-page summaries are often well written, very concise, and present just the “facts” – these buyers buy on facts. Small business buyers buy on 75% emotion and 25% facts.
Buyers who are buying a small business have often not owned a business before and are fearful (another emotion) of buying a new business. How do they confront these fears? They almost always do this by requesting more information. They believe that they will minimize their risk by getting as much information as possible. By answering the buyer’s questions in writing in advance, you get the opportunity to position answers to questions positively, point out the highlights of the business, point out opportunities for growth, explain why sales may not be increasing, and many other important questions.
These buyers often go home and want to look at something in writing to help them decide what to do. A Business Summary gives them something to look at and review, and allows them to think about it. It helps you control where the buyer’s thoughts lie. Like we mentioned before, these buyers buy on emotion so it is important to control this process, point out the positive points, and minimize the buyer's fears, in writing.
To make a point clear, it is important to make someone see it, hear it, and write it. By discussing the information with the buyer and also providing a professional summary of your business, you get the chance to reinforce what you want to emphasize in your business.
Why shouldn’t I advertise my business for sale in the newspaper?
Advertising in the newspaper is no longer as effective as it used to be. Open up the Sunday edition of your local newspaper and see how many business-for-sale ads are there. 90% of business brokers no longer advertise in the newspaper, and neither should you. It’s a waste of time unless you have a business that is predominantly purchased by one nationality of buyer (i.e. Chinese restaurant – then we would recommend advertising it in the local Chinese newspaper).
I am worried about confidentiality. How is my confidentiality protected?
Your business name is not included in advertisements. Non-disclosure agreements (NDAs) are also required from buyers prior to releasing your Business Summary.
What if I can’t or don’t want to show my business?
Whether you choose to work with Morgan & Westfield or a full commission business broker, showing your business is essential to securing a sale. It takes no special skill to show a business, and by showing the business yourself, you are not charged for the time a full commission broker would spend performing this task for you.
Do we ever actually meet in person?
No, our interaction with business owners is strictly through phone calls and email. In addition to saving time, this is another aspect to our firm that allows us to save you money.
Do other brokers really charge that much?
Yes, commission-based brokers charge anywhere from 8 to 12%, with the national average rate being 10%.
If you don’t require a contract, then what am I “canceling” when you say I can cancel at any time?
You can cancel the marketing service, which requires a monthly fee, at any time. We only require an agreement, not a long-term contract. This agreement is simply an outline of our responsibilities and does not require a long-term commitment.